I’ll let you in on a little secret: whenever I am trying to learn something new, from using my computer to drawing, my first choice for a how-to book is the Dummies series. They tend to be very clear, well written, full of useful information, and just humorous enough to make even the duller topics interesting. So, when I was first trying to learn about investing, the rather extensive library of books for Dummies is one of my first choices.
In this way, I came across Investing Online For Dummies
Overview
Online Investing for Dummies is broken down into four different sections, covering the whole range of information available about investing online. The books starts, as many beginning investment books do, with a primer on getting yourself financially ready to invest (by doing things like eliminating high interest debt). Since this is a book about online investing, the second chapter focuses largely on the many sources of information about individual stocks and companies you can find online. The next few chapters provide an overview on the different types of investment accounts and a brief summary of the brokerages you can choose for your accounts (very helpful, if you’re trying to decide where to start your investing career). To finish off the first part of the book, there’s information about how to buy and sell stocks, the different types of orders that can be placed, and information about using margin.
The second part of the book helps you to find all the resources available for the online investor. There are chapters that cover the basics of stocks (including how they move in the short term as well as longer term shifts in stock prices), how to find out information from other investors (hint: blogs are helpful), and ways of measuring your performance. In this section, there are a lot of web addresses listed, most which I haven’t had a chance to review yet, but all of which seem to provide good information for anyone looking to learn more about investing. The last chapters in this section cover asset allocation, mutual funds, and ETFs.
The third part of the book covers more advanced topics, from evaluating individual companies to determine good stock valuations, to using stock screens to narrow your investment possibilities. There’s also some other advanced topics, such as buying individual bonds online, that are covered in the course of these chapters. Most interesting (to me, at least) is the chapter on evaluating stocks, which provides a pretty decent introduction to value investing.
The last section of the book is the Part of Tens, a common feature of the Dummies series. This section serves to sum up some of the pertinent points covered in the rest of the book, as well as going into depth on other topics that weren’t already covered. Here, there’s a list of ten common mistakes made by online investors and a list of ways to protect your investments and identity while you are online. But wait, there’s more: there’s also three chapters of the book available online, covering supplemental information about investing online, technical analysis, and initial public offerings. You can view them here, if you’re curious.
Evaluation
Investing Online for Dummies has plenty of good attributes. It’s easy to read, written in a hand holding fashion, and provides plenty of outside resources. If you’re brand new to the world of investing, particularly if you want to do so primarily online, it’s a must read. Even if you’re a more experienced investor, the sheer number of resources available means there’s almost certainly something in there that you haven’t considered.
On the negative side, the number of links provided make the book feel a times like nothing more than a jumble of websites. Furthermore, it’s sometimes overwhelming, reading through such a large collection of links and wondering which will be the most helpful to you. While the books is very good at directing you where to seek information, if you’re just starting out, the nonspecificity will make it harder to determine where to get started with your investments.
Overall
I like this book; it was one of the first investing books I ever read, and I continue to glean new information each time I reread it. I highly recommend it, although it’s best taken in a little at a time. Attempt to visit all of the sites listed in a short time, and you’ll be overwhelmed. But if you’re not sure how to get started, or want a guide to the myriad information online that concerns investing, be sure to give it a thorough read.
- Investing 101: Value Investing
- Book Review: The Motley Fool Investment Guide
- Book Review: The Best Investment Advice I Ever Received
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