ALPHA TEACH YOURSELF INVESTING IN 24 HOURS: AN ANALYSIS (part 1)

Investing Myths

by

Charles Lamson

Investing is the process of being proactive about where your money works and how much it earns. You want your money to earn enough so that inflation and taxes do not eat it up with nothing left for you. Investing allows you to direct your financial future with a great deal more control than you may have guessed.

TIME SAVER

• Begin an investing notebook or file to keep track of investment goals, worksheets, and other papers you generate as you work through the post-by-post analysis of this book Alpha Teach Yourself Investing in 24 Hours. Keep it handy because some of the posts will challenge you to complete projects. It will also get you in the habit of organizing your papers, which will come in handy as your investments grow.

Myth #1: Investing is Risky

Investing is only as risky as you make it. The more risk you are comfortable taking, the greater your return is likely to be. I will look at risk in much more depth as we work through the book post-by-post in this in-depth analysis. It is important that you be honest with yourself.

There are many lower risk opportunities you can choose that will get you to your goals without keeping you awake at night worrying about your investments. Peace of mind is an important investment also. (Remember the story of the race between the tortoise and the hare. It was the slow but steady tortoise who won. This book aims to show just such a strategy---among others.) 

Keep in mind that often the risk of not doing anything is as great or greater than being proactive.

Myth #2: Investing is Hard

It is not that hard to put together a solid investment plan and make adjustments as they are needed.

This blog will walk you through the process post-by-post. When we are through with the analysis of this book, you will have a solid foundation to begin your investing program. You will have all the tools you need (or know where to find them) to make intelligent investment decisions.

Myth #3: You Must Be an Economics Major

Do not worry about economics. The media gives great attention to key indicators from "the dismal science," and rightly so. Key economic indicators are important bits of information and may give clues to future movement of the economy and stock market.

You have at your disposal for free---or at very little cost---the best minds in the world to digest and interpret these figures for you.

A larger reality is that these same experts have predicted what those key numbers are likely to be and the market has absorbed them before they are announced. If the actual numbers differ dramatically from the consensus opinion, the market may react abruptly---sometimes up and sometimes down. This analysis will tell you who to listen to and what it all means to your investment plans.

Myth #4: You Need to Be a Computer Nerd

Nope. All the information you need to make successful investment decisions is available the old-fashioned way. However, a basic knowledge of the Internet will dramatically improve your ability to access information rapidly and with greater efficiency.

Keep in mind that you do not need to buy a computer to access the Internet. Most public libraries have computers with Internet access that you can use for free. Some even offer classes for getting started. 

It is recommended to buy a computer and sign up for Internet service. You will find investing is much easier and more efficient this way. A computer adequately outfitted to access the Internet for investing information should not cost more than $1,200-$1,500.

Unlimited internet access will not usually cost more than $20 per month. Included in the service will be e-mail capabilities which will allow you to subscribe to free investing newsletters, and so on.

To be continued...

*SOURCE: ALPHA TEACH YOURSELF INVESTING IN 24 HOURS, 2000, KEN LITTLE, PGS. 4-6*

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