Learning to Invest

[TMA_1]

Okay... I am in some pretty deep water here, but I am interested in investing. I was wondering if anybody knows of some tutorials on the basics of investing, and if there is any software available where you can do some mock investing for fun.

[Khan]

Well if you're interested in currency trading ACM do free trials and tutorials, and the people keep you up to date and help you out with anything you need to know.

[Andrew]

I took most finance courses at my university. :)

If you need to use charts to look at stocks use Stockcharts

I know for mutual funds I would use Globefund (Use Fund filter to find what you are looking for.)

Seems that most people nowadays use mutual funds because they simply buy the fund and let someone else manage it. But then you can get lots of fees such as MER and Loads.

If you are buying individual stocks you need to buy at least 20 different stocks. There are many different formulas (statistics) to figure out what return you can get for the risk (20 stocks is minimum needed to reduce some risk, but of course the stocks need to be diversified). But if you are buying individual stocks you need to know what you are doing.

If you are looking for something that makes what the market makes you may be interested in iUnits or Exchange Traded Funds

Actually it looks like wikipedia has some basic info on some stuff such as Investment Management

For my investment class we did a mock "spend $100,000 on stocks/options etc" and see what you could get. My group got first in the class :P. But that was with a loss on the $100,000 (we only had 95,000 at the end, the reason for this was the stock market took a tumble a couple days after everyone bought there stocks)

We used http://www.ichallenge.net/ but it looks like it got bought out. redirects to

http://simulator.investopedia.com/ It looks like it is free right now.

Don't ask me about options such as buying/selling puts and calls. That confuses the hell out of me.

And if you are investing you would most likely be putting it into your RRSP (I don't know what it is called in the USA or what they do there). RRSP means you buy assets and put it into the RRSP which stays tax free until you withdraw the assets.

I'm not sure where there are tutorials to investing on the web. wikipedia might be a good start to figure out what you need to look into.

If you need anything more specific let me know. There are lots of books out there about this stuff as well.

Disclaimer: I am not a certified financial planner and do not currently have any investments. Gotta pay off the student loan first :P

[Egeides]

Top investing tutorial: http://www.fool.com/school.htm

Another tutorial: http://beginnersinvest.about.com/

Glossary: http://www.fool.com/school.htm?ref=G02A06

Article I liked: www.kuro5hin.org/story/2004/11/21/104921/15

www.fool.com do not take exactly the same approach towards diversity. For diversity and non-complication, some find that SPDRs do miracles. So diversity at low cost for the normal guy (they're some basket of stocks from a given sector without all the management to pay).

Also for diversity, some can cover many different sectors while they are not assured from the base: a house is normally not an investment, but having a place to live if it goes bad sort of. So those having a negative view of the economy or the world turn more towards this and go turtle (the most extreme become farmers :P). Among those we can find "gold bugs", people who hoard gold/silver and wait for the market to crash (and get stolen?), or some buying metals/oil/etc and related stocks on the market (but mines are not as possessing metals). For me, it looks like diversity is also about the most to least secure pyramid.

Notice if you're American: Since the US$ seems to be going down (printing money for the war?..), some put their economies otherwise than in cash.

NB:

Like for Andrew, this is simply personal research. As you can see, I went to check the pessimist part of the pyramid (but www.fool.com is not at all oriented that way and I find the most optimistic there).

[Andrew]

Yah the American economy is getting bad. The USD is worthless and they decreased the interest rates by .5% which means the USD will become even more crappy and have fun with the inflation. They are bailing out stupid people who got mortgages who couldn't afford them and the banks who gave out mortgages even though they knew they couldn't afford them.

Did I mention that the CAD is within 1 cent of the USD? And I think 5 years ago it was 30-40 cents away? Here is a yahoo finance chart showing the CAD gaining on the USD. It was at .65 back in Jan 2003. Good thing for Canadians traveling to the States and other places. Although bad for our manufacturing since they are all closing.

[Tatar Khan]

I believe in US, one can write off the mortgage payments for purpose of taxes, so many just pay the interest ont he mortgages and let the banks reposes their houses after they die.

As for investing take few courses and do self study for investing to understand the way market works, than use some simulators. I used http://www.stocktrak.com/ in our investments class.

You must outline what exactly your horizon for investments and go from there. If you want to invest for long term than go mutual funds or segregated funds. You can tax shield those in most countries as pension funds, but than there are regulations that often won't allow you to take the money out before the retirement.

I did my investments at one time with future options,  they are one of the most wildest derivative securities out there. I woke up 3 times during the night to check on things in different markets to make sure that i won't lose the money. So if you planning to be active investor keep in mind that markets are open 9 to 4 in most countries and that it requires a lot of dedication.

[Egeides]

Regarding dedication, I think it depends with what and for what you are going for. Trading? Sure. But get some SPDRs - or something acting like it and following a whole section of economy - and it won't move as quickly. I think it's part of the "take soemthing adapted to yourself".

[Andrew]

Also depends if you are investing because you plan on retiring in 40 years or want some return in the short term (to make sure you don't lose money to inflation?).

Yes I like the idea of iunits or the SPDR. You get exactly what the market gets and you can choose different sectors. Not much to do other than figure out when the best time to buy is (most likely when the market is down). Then wait 30 years and you should get 10% a year, at least that is the historical numbers the markets make.