Investing For Dummies

Eric Tyson is a nationally recognized personal finance counselor, writer, and lecturer. He has been featured and quoted in hundreds of local and national news outlets. He has appeared on NBC's Today Show, ABC, CNBC, FOX News, PBS Nightly Business Report, and CNN. He has also been heard on CBS national radio, NPR Sound Money, Bloomberg Business Radio, and Business Radio Network.

Introduction 1 About This Book 1 Foolish Assumptions 3 Icons Used in This Book 3 Beyond the Book 4 Where to Go from Here 4 Part 1: Getting Started with Investing 5 Chapter 1: Exploring Your Investment Choices 7 Getting Started with Investing 8 Building Wealth with Ownership Investments 9 Entering the stock market 10 Owning real estate 10 Running a small business 12 Generating Income from Lending Investments 13 Considering Cash Equivalents 14 Steering Clear of Futures and Options 15 Passing Up Precious Metals 17 Counting Out Collectibles 18 Chapter 2: Weighing Risks and Returns 21 Evaluating Risks 22 Market-value risk 23 Individual-investment risk 28 Purchasing-power risk (aka inflation risk) 30 Career risk 32 Analyzing Returns 33 The components of total return 33 Savings and money market account returns 35 Bond returns 36 Stock returns 36 Real estate returns 39 Small-business returns 40 Considering Your Goals 41 Chapter 3: Getting Your Financial House in Order 43 Establishing an Emergency Reserve 44 Evaluating Your Debts 45 Conquering consumer debt 46 Mitigating your mortgage 46 Establishing Your Financial Goals 49 Tracking your savings rate 49 Determining your investment tastes 50 Funding Your Retirement Accounts 52 Gaining tax benefits 52 Starting your savings sooner 53 Checking out retirement account options 53 Choosing retirement account investments 55 Taming Your Taxes in Non-Retirement Accounts 56 Figuring out your tax bracket 56 Knowing what's taxed and when to worry 57 Choosing the Right Investment Mix 58 Considering your age 59 Making the most of your investment options 59 Easing into risk: Dollar cost averaging 61 Treading Carefully When Investing for College 63 Education Savings Accounts 64 Section 529 plans 64 Allocating college investments 65 Protecting Your Assets 66 Part 2: Stocks, Bonds, and Wall Street 69 Chapter 4: The Workings of Stock and Bond Markets 71 How Companies Raise Money through the Financial Markets 71 Deciding whether to issue stocks or bonds 72 Taking a company public: Understanding IPOs 73 Understanding Financial Markets and Economics 74 Driving stock prices through earnings 74 Weighing whether markets are efficient 75 Moving the market: Interest rates, inflation, and the Federal Reserve 77 Chapter 5: Building Wealth with Stocks 83 Taking Stock of How You Make Money 84 Defining "The Market" 84 Looking at major stock market indexes 85 Counting reasons to use indexes 86 Stock-Buying Methods 88 Buying stocks via mutual funds and exchange-traded funds 88 Using hedge funds 90 Selecting individual stocks yourself 90 Spotting the Right Times to Buy and Sell 91 Calculating price-earnings ratios 92 Citing times of speculative excess 93 Buying more when stocks are "on sale" 101 Avoiding Problematic Stock-Buying Practices 104 Beware of broker conflicts of interest 104 Don't short-term trade or try to time the market 105 Be wary of gurus 108 Shun penny stocks 109 The Keys to Stock Market Success 109 Chapter 6: Investigating and Purchasing Individual Stocks 111 Building on Others' Research 111 Discovering the Value Line Investment Survey 112 Considering independent brokerage research 117 Examining successful money managers' stock picks 117 Reviewing financial publications and websites 119 Understanding Annual Reports 119 Financial and business highlights 120 Balance sheet 121 Income statement 124 Exploring Other Useful Corporate Reports 126 10-Ks 127 10-Qs 127 Proxies 127 Getting Ready to Invest in Stocks 128 Understanding stock prices 129 Purchasing stock "direct" from companies 131 Placing your trade through a broker 131 Chapter 7: Exploring Bonds and Other Lending Investments 133 Banks: Considering the Cost of Feeling Secure 134 Facing the realities of bank insurance 1