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Need to know what I need to know
Old 08-06-2009, 02:59 PM   #1
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Need to know what I need to know

I posted here a while back. I've opened an account with Fidelity and put the minimum 50K in their Portfolio Advisory Service. I know it's considered a poor choice, but I'm such a novice and I figure it's better than doing nothing while I'm trying to learn more. Besides I'm just curious to see how they do with it.

Now here is a quote from a reply by Samclem to another thread :

"Here's the problem everyone has: To recognize a good FP you need to have a foundation of your own knowledge (what is asset allocation, does active management really work and is it worth the cost, how efficient are different asset classes from a tax POV, how are ETFs different from mutual funds different from individual stocks, how does the risk of a bond fund differ from the risk of an individual bond, what asset classes do you want to hold (and in what proportions), etc). If you've got this foundation of knowledge, you'd be able to tell if an FP was doing the right thing for you. If you do not have this foundation of knowledge, there's really no way to tell if the FP is competently handling your portfolio. And, once you've got this level of knowledge, it's really not hard to just do the job yourself and save the fee."

Well that just about nails it exactly. So my question: Is there a good recommended source to gain this "foundation of knowledge" as explained above? A kind of "for dummies" type book or websight that would just explain all the terms and various dynamics of the stuff Samclem describes.

Just want to add also that I recently saw 2 interviews with David Swenson on the PBS Consuelo Mack show and was very impressed by him. I read "Enough" by John Bogle on his recommendation and am now thinking maybe I should move over to Vanguard.
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Old 08-07-2009, 12:54 PM   #2
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Hi Mike,

For a foundation of knowledge of personal finance, you can go to a bookstore and browse the personal finance section and pick up a good book or two. They should have several books there. Or you can check the websites of popular magazines (such as Kiplinger's, SmartMoney etc.) or click on the personal finance links on well know websites (yahoo, about.com, fool.com etc.).

Good luck.

p.s. Yes, there are 'Dummies' books out there too on personal finance. Here is one sample link: Amazon.com: Personal Finance for Dummies, Fourth Edition (9780764525902): Eric Tyson: Books
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Old 08-07-2009, 03:08 PM   #3
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Do a general web search using the keywords "Investing 101". You will get a multitude of hits. Pick any one, see if it suits your experience level and go from there.
Way back when, I used Morningstar's Investing Classroom (online) to learn the very basic terminology and graduated to investing books from there. I had taken Business 100 in college. That's all I knew.
Common Sense on Mutual Funds, The 4 Pilllars of Investing and the NYT series of mini-guides for beginning investors were among my first reads.
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Old 08-07-2009, 03:10 PM   #4
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If you go over to bogleheads dot org, look at their reading list, and read the wiki.

tons of info to get you started.

ta,
mew
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Old 08-07-2009, 03:52 PM   #5
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If you go over to bogleheads dot org, look at their reading list, and read the wiki.

tons of info to get you started.

ta,
mew
I was surprised to see that we didn't have a books FAQs for the forum.

The direct link to the Bogles book list is here . I have read about 1/2 of the books and I can recommend this is a good list. I'd also add Stocks for the long run and Predictably Irrational


The financial magazine are a mixed bag sometimes they have good information other times they are shills for the financial industry. They are often referred to as financial porn with good reason IMO.
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Old 08-07-2009, 05:18 PM   #6
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Thanks, these replies are a help.

Would still be interested in more specific books or sources that helped members here get a good start along the learning curve, which looks pretty steep from where I stand....
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Old 08-07-2009, 05:53 PM   #7
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This is the website I send newbie investors to:

http://investingessentials.blogspot.com/

I think it's comprehensive and pretty easy to read. It gives you a really good overview and helps you figure out what you need to learn more about!
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Old 08-07-2009, 05:57 PM   #8
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There was an investment book reading list floating around here somewhere. Anyone got the link?
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Old 08-07-2009, 05:57 PM   #9
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Originally Posted by Mikedb View Post
Thanks, these replies are a help.

Would still be interested in more specific books or sources that helped members here get a good start along the learning curve, which looks pretty steep from where I stand....
It's not that bad but I did need to read and study a few books to get started. I am a scientist with an engineering background, and had absolutely zero interest in money or investing or anything like that for the first half century of my life. Then I had to learn. I found out that The Bogleheads book list (that Clifp also linked to) is terrific. Here are some books on the list that I like, all of which are available on Amazon or at Barnes and Noble:

I would start with The Bogleheads' Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf.

The Four Pillars of Investing by William Bernstein is a modern classic. In my opinion it is ungodly boring but it is good for you like castor oil. It will give you the investing instincts that you need.

I really liked All About Asset Allocation by Rick Ferri. He has an interesting section on bond investments and a lot of info about asset allocation. This book and the Larimore et al. book above are both easy reads, whereas the Four Pillars (in my opinion) will help you fall asleep at night. You still need to read it.

Also, the Bogleheads forum is an especially good one for investment advice, whereas we discuss many aspects of early retirement here, including investments.
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Old 08-07-2009, 06:02 PM   #10
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There was an investment book reading list floating around here somewhere. Anyone got the link?
Click on "Links" to the left of "User CP" above. Take a look under "Retirement Planning Resources", "Publications" and "Investment & Brokerage".
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Old 08-07-2009, 06:08 PM   #11
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Click on "Links" to the left of "User CP" above. Take a look under "Retirement Planning Resources", "Publications" and "Investment & Brokerage".
TY - This is the one I was looking for...
Investment Books
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Old 08-07-2009, 06:09 PM   #12
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TY - This is the one I was looking for...
Investment Books
Which is the same link that Clifp and I also linked to, above....
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Old 08-07-2009, 06:10 PM   #13
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Which is the same link that Clifp and I also linked to, above....
Duh....
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