Investing All–in–One For Dummies

Eric Tyson is a best-selling personal finance book author and has penned five national best sellers. He is also the only author to have four of his books simultaneously on Business Week's business book bestseller list. His Personal Finance for Dummies, a Wall Street Journal best-seller, won the Benjamin Franklin Award for Best Business Book of the Year. Eric's syndicated newspaper column is read by millions of readers weekly. He is a former columnist and award-winning journalist for the Sunday San Francisco Chronicle.

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 3

Where to Go from Here 4

Book 1: Getting Started with Investing 5

Chapter 1: Exploring Your Investment Choices 7

Getting Started with Investing 8

Building Wealth with Ownership Investments 8

Generating Income from Lending Investments 11

Considering Cash Equivalents 13

Where to Invest and Get Advice 14

Chapter 2: Weighing Risks and Returns 17

Evaluating Risks 18

Analyzing Returns 28

Compounding Your Returns 35

Chapter 3: The Workings of Stock and Bond Markets 39

How Companies Raise Money through the Financial Markets 39

Understanding Financial Markets and Economics 42

Book 2: Investing in Your 20s and 30s 51

Chapter 1: Using Investments to Accomplish Your Goals 53

Setting and Prioritizing Your Shorter-Term Goals 53

Investing in Retirement Accounts 56

Chapter 2: Minimizing Your Taxes When Investing 63

Understanding Investment Taxes 63

Reducing Your Taxes When Selling Investments 66

Chapter 3: Laying Out Your Financial Plans 71

First Priorities: Paying Off High-Cost Debt and Building a Safety Reserve 72

What about Paying Down Other Debts? 73

Sorting Out Your Financial Plans 76

Knowing the Impact of Investing for College Costs 79

Securing Proper Insurance 83

Chapter 4: Starting Out with Bank Accounts and Money Market Funds 85

Understanding FDIC Bank Insurance 86

Investing in Banking Account and Savings Vehicles 86

Feeling Secure with Your Bank 89

Defining Money Market Mutual Funds 91

Understanding Money Market Fund Holdings 93

Protecting and Accessing Your Money in Money Funds 94

Using Money Market Funds in Your Investment Plan 95

Understanding Traits of Leading Money Funds 96

Book 3: Starting with Stock Investing 99

Chapter 1: Gathering Information on Stocks 101

Looking to Stock Exchanges for Answers 102

Grasping the Basics of Accounting and Economics 103

Staying on Top of Financial News 108

Reading (And Understanding) Stock Tables 110

Using News about Dividends 115

Evaluating Investment Tips 117

Chapter 2: Investing for Long-Term Growth 119

Becoming a Value-Oriented Growth Investor 120

Choosing Growth Stocks with a Few Handy Tips 121

Chapter 3: Investing for Income: Dividend-Paying Stocks 129

Understanding the Basics of Income Stocks 130

Analyzing Income Stocks 134

Exploring Some Typical Income Stocks 138

Chapter 4: Using Basic Accounting to Choose Winning Stocks 143

Recognizing Value When You See It 144

Accounting for Value 147

Book 4: Looking at Bond Investing 161

Chapter 1: Bond Fundamentals 163

Understanding What Makes a Bond a Bond 164

Why Hold Bonds? 167

Introducing the Major Players in the Bond Market 169

Buying Solo or Buying in Bulk 170

The Triumphs and Failures of Fixed-Income Investing 172

Realizing How Crucial Bonds Are Today 176

Viewing Recent Developments, Largely for the Better 177

Chapter 2: All about the Interest 179

The Tricky Business That Is Calculating Rates of Return 180

Measuring the Desirability of a Bond 182

Understanding Yield 188

Recognizing Total Return (This Is What Matters Most!) 191

Measuring the Volatility of Your Bond Holdings 194

Returning to the Bonds of Babylonia 196

Chapter 3: Types of Bonds 197

Exploring the Many Ways of Investing with Uncle Sam 197

Industrial Returns: Corporate Bonds 201

Lots of Protection, a Touch of Confusion: Agency Bonds 205

Banking Your Money on Other People’s Mortgages 208

(Almost) Tax-Free Havens: Municipal Bonds 209

Chapter 4: Investing (Carefully!) in Individual Bonds 213

Navigating Today’s Individual Bond Market 213

Dealing with Brokers and Other Financial Professionals 215

Doing It Yourself Online 219

Perfecting the Art of Laddering 222

Chapter 5: Picking a Bond Fund That Will Serve You for Life 225

Defining the Basic Kinds of Funds 226

What Matters Most in Choosing a Bond Fund of Any Sort 230

Book 5: Moving on to Mutual Funds 233

Chapter 1: Considering Mutual Funds’ Pros and Cons 235

Introducing Mutual Funds and Exchange-Traded Funds 236

Getting a Grip on Funds 236

Opting for Mutual Funds 240

Addressing the Drawbacks 248

Understanding Exchange-Traded Funds 250

Chapter 2: Finding the Best Funds 255

Evaluating Gain-Eating Costs 255

Weighing Performance and Risk 263

Recognizing Manager Expertise 269

Chapter 3: Buying Funds from the Best Firms 271

Finding the Best Buys 271

Discount Brokers: Mutual Fund Supermarkets 277

Places to Pass By 281

Book 6: Investing Online 283

Chapter 1: Getting Ready for Online Investing 285

Why Investing Online Is Worth Your While 286

Getting Started 286

Gut-Check Time: How Much Downside Risk Can You Tolerate? 289

Passive or Active? Deciding What Kind of Investor You Plan to Be 290

Chapter 2: Getting Your Device Ready for Online Investing 293

Turning Your Device into a Trading Station 294

Tracking the Market’s Every Move 297

Monitoring Market-Moving News 302

Checking In on Wall Street Chatter 306

Keeping Tabs on the Regulators 310

Executing Trades 312

Searching the Internet High and Low 313

Keeping the Bad Guys Out: Securing Your PC 313

Mastering the Basics with Online Tutorials and Simulations 315

Chapter 3: Connecting with an Online Broker 319

Finding the Best Broker for You 320

Separating the Types of Brokerages 322

Avoiding Hidden Fees 332

Finding Out What Reviewers Think 334

Is Your Money Safe? Checking Out Your Broker 335

Cutting the Cord: Mobile Trading 336

Pay Attention to Where Your Cash Is Parked: Money Market Funds 338

Buying Stocks and Mutual Funds without a Broker 338

Opening and Setting Up Your Account 341

Chapter 4: Entering and Executing Trades 343

Understanding How Stock Trades and Shares Are Handled 344

Getting It Done: Executing Your Trades 348

Book 7: Introducing Fundamental Analysis 353

Chapter 1: Understanding Fundamental Analysis 355

Why Bother with Fundamental Analysis? 356

Knowing the Tools of the Fundamental Analysis Trade 361

Making Fundamental Analysis Work for You 363

Chapter 2: Getting Up to Speed with Fundamental Analysis 365

What Is Fundamental Analysis? 366

Comparing Fundamental Analysis with Other Ways of Picking Investments 372

Putting Fundamental Analysis to Work for You 374

Making Money with Fundamental Analysis 377

The Fundamental Analysis Toolbox 378

Chapter 3: Gaining an Edge with Fundamental Analysis 383

Better Investing with Fundamentals 384

Relying on the Basic Info the Pros Use 390

Figuring Out When to Buy or Sell a Stock 394

Chapter 4: Getting Your Hands on Fundamental Data 401

Getting In Sync with the Fundamental Calendar 402

Getting up to Speed with the Basic Accounting and Math 410

How to Get the Fundamental Data You Need 414

Book 8: Investing in Real Estate 421

Chapter 1: Evaluating Real Estate as an Investment 423

Understanding Real Estate’s Income- and Wealth-Producing Potential 424

Recognizing the Caveats of Real Estate Investing 426

Comparing Real Estate to Other Investments 427

Determining Whether You Should Invest in Real Estate 432

Fitting Real Estate into Your Plans 434

Chapter 2: Covering Common Real Estate Investments 439

Identifying the Various Ways to Invest in Residential Income Property 439

Surveying the Types of Residential Properties You Can Buy 447

Considering Commercial Real Estate 452

Buying Undeveloped Land 453

Chapter 3: Identifying Sources of Capital 457

Calculating the Costs of Admission 458

Rounding Up the Required Cash by Saving 460

Overcoming Down Payment Limitations 460

Chapter 4: Location, Location, Value 465

Deciding Where to Invest 466

Finding Properties to Add Value 467

Evaluating a Region: The Big Picture 469

Investigating Your Local Market 472

Evaluating Neighborhoods 485

Mastering Seller’s and Buyer’s Markets 490

Index 493