Time for a fling–with stocks
Question: My wife and I are retired teachers. We have good pensions and do not have any debt except our mortgage. I have recently given some thought on investing in the stock market. I have $10,000 I can use that, if lost , would not affect my lifestyle. I realize that there are “no get rich quick” methods. How can I best educate myself on investing in the market? Santos, Brooklyn, NY
Answer: The first time I was really exposed to stock market investing was when I used to hang out at the Seafarers International Union’s hiring hall in Brooklyn. I was waiting to catch a ship, but a number of retired seafarers would sit around for much of the day, telling stories and exchanging stock tips. They would sit with the newspaper stock tables–this was well before the Internet–and debate where to place their bets.
Stock picking is fun. You’re matching your wits in the most competitive market in the world and the price to play is low since commission costs aren’t much with online trading.
Most important, you plan on investing with money you can afford to lose. You aren’t putting your retirement at risk to your stock-picking prowess (or luck). It’s good entertainment and, hopefully, you’ll make money.
What are some good resources? My top pick is The Intelligent Investor by Benjamin Graham. It was first published in 1949. Stock picker extraordinaire Warren Buffet has called it the “the best book on investing ever written.” I would look at the version that was recently updated with commentary by Jason Zweig, the savvy financial columnist. A much shorter book that is a quick read and full of insight is The Little Book of Value Investing by Christopher Brown, one of the best investors in he business.
You can get a good basic tutorial on the technical aspects of buying and selling stocks at the Investopedia tutorials. Morningstar and Bloomberg are terrific for researching specific stocks and keeping up with industry trends.
Two writers on investing that I regularly follow are James Stewart with his Common Sense column at Smart Money and Jason Zweig with his Intelligent Investor column at the Wall Street Journal.
My last suggestion is just for fun if you find investing enjoyable. It’s More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael Mauboussin. He brings many abstract investing ideas alive with insights drawn from behavioral economics, cognitive science, market research, anthropology and other disciplines.
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