Investing 101

Investing 101

by Kathy Kristof

Paperback(Updated and Expanded Edition)

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People wanting basic advice about stocks, bonds, mutual funds, retirement planning, and tax strategies are often frustrated by information overload. Picking the right book seems as daunting as deciding what to do with their savings and investments.

Investing 101: Updated and Expanded removes both roadblocks, putting people on a path that they can understand and stick with. Kristof is renowned for taking the mystery and anxiety out of investing by keeping choices manageable.

Kristof walks readers through the entire investment cycle and the way they think of their financial lives, rather than presenting stand-alone concepts like stocks and real estate. This expanded edition has new information about 529 college savings plans, annuities, Roth IRAs, reverse mortgages, and why declining markets can be good for you. It includes a cautionary look at home mortgages as investments. There's even a portfolio for the lazy investor.

Kristof's loyal readership and the success of this book's first edition demonstrate that she understands what's on the minds of investors as intimately as she knows what’s happening in financial markets.

Winner: Cover and Interior Design, The Bookbinders Guild of New York/2009 New York Book Show Awards

Product Details

ISBN-13: 9781576603079
Publisher: Wiley
Publication date: 08/20/2008
Series: Bloomberg Series , #27
Edition description: Updated and Expanded Edition
Pages: 260
Sales rank: 188,575
Product dimensions: 6.10(w) x 9.10(h) x 0.90(d)

About the Author

Los Angeles Times business writer Kathy Kristof is nationally known for her weekly syndicated personal finance column, which reaches forty million readers online and in more than fifty major newspapers. She is a sought-after lecturer at investment conferences and appears regularly on radio and television.

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Table of Contents

Introduction xi

1 Fixing Money Problems 2
Finding and fixing the psychological ills that keep us from investing wisely.

2 Risk and Reward 16
The basics about how taking a few risks can reap long-term benefits.

3 The Starting Point 30
How to allocate your assets based on your goals.

4 Diversification 54
Dividing your assets among different investment categories is easier when you think about what different types of investments can do for you, rather than what they are. When you boil things down that way, there are just five investment categories, each of which offers an array of specific investments. Here are the categories and the choices within them.

5 Picking Individual Stocks 86
Using fundamental indicators of value to pick good stocks.

6 Tough Sell 108
How to figure out when it's time to call it quits with an investment.

7 Investing in Bonds 118
Where to put bonds in your portfolio and which bonds to choose.

8 Mutual Funds 126
A primer on mutual funds, from what they are to where to find one that suits your needs.

9 Socially Responsible Investing 150
What socially responsible investing is about and how to find socially conscious mutual funds.

10 Real Estate Investment Trusts 156
REITs allow individuals to invest in commercial real estate to diversify their portfolio and stabilize investment returns.

11 International Investing 162
The basics on investing outside of the United States.

12 Tax-Favored Investing 172
Uncle Sam gives Americans lots of ways to defer taxes while we save. Using these tax-favored vehicles can give your portfolio a boost. Here are your choices and what they can do for you.

13 Starting Small 190
Think you can't invest because you don't have a pile of cash to start? Never fear. There are several choices for people with as little as $20 or $25 a month.

14 The Lazy Investor's Portfolio Planner 198
The quintessential hands-off portfolio for the wise investor with very little time on his hands. You can do well quickly and easily with only a few hours a year.

15 How to Fix Your Broken Records 218
Record keeping is one of the most important—and widely ignored—steps in wise investing. But good records can help you monitor your portfolio and help you determine when to buy and sell. They can also save you a small fortune in taxes.

16 Getting Help 224
Read it all, but still don't want to go it alone? Here’s a quick guide on how to hire someone to help you.

Glossary 234
Definitions for commonly used jargon so you can interpret Wall Street speak.

Index 237

Worksheet Reference

Monthly Budget 6

Risk Quiz: How Much Risk Can You Take? 23

College Cost Calculator 48

Is It a Buy 93

Calculating the Tax Implications of Selling Too Soon 116

Picking a Fund That Suits You 143

Determining What You Have.

Cash 201

Income Investments 201

Growth Investments 203

Real Estate 204

Debt 204

Keeping Tabs on Your Investments 221

What People are Saying About This

From the Publisher

"Investing 101 is a sensible, well-written, and comprehensive guide to investor options. I learned much from this book and am certain you can too."
Stephen Brobeck, Executive Director, Consumer Federation of America

Praise for the first edition:

"In Investing 101, Kathy Kristof skillfully guides the novice investor, step-by-step, along the path to investment success. It's an ideal primer for anyone who wants to enter the financial world and would like a helping hand."
Myron Kandel, Founding Financial Editor, CNN

"Too many of us give too little thought to the underpinnings of investing: how much risk to shoulder, when to sell, etc. Kathy Kristof explains these basics in language we all can understand. Investing 101 is sure to become a great reference guide for novices and longtime investors alike."
—Steve Dinnen, Personal Finance Columnist, The Des Moines Register

"Kathy Kristof knows investing inside and out. She can take even the most complicated information and make it easy to understand—and entertaining."
Ilyce R. Glink, National Syndicated Columnist, Author of 100 Questions You Should Ask about Your Personal Finances

"If you're just getting started in the investing world, this is the book you need. Kathy Kristof's smart, sensible advice demystifies the markets and shows you exactly what you need to know to achieve your financial goals. Investing 101 offers a road map to financial success without gimmicks or secret formulas—and it's a whole lot of fun to read, besides."
Liz Pulliam Weston, Personal Finance Columnist, Los Angeles Times

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Investing 101 4.2 out of 5 based on 0 ratings. 17 reviews.
Anonymous More than 1 year ago
The organization of the book allows quick reference if the reader is seeking specific information. When taken in order, the chapters serve a beginning investor well, walking the reader through basic information and definitions before going more in depth later in the book. I think the section on determining the individual's risk tolerance and (investment) safety needs is particularly helpful to someone trying to determine how much money needs to be set aside for major purchases or events, and for an emergency fund.
Guest More than 1 year ago
Broad enough to cover the basics for new investors, combined with an efficient delivery.
Nitestar on LibraryThing More than 1 year ago
I have just finished reviewing Investing 101. As the title implies, this book takes a detailed look at finances (personal) but more to the point it takes a look at what is a financial market and how to invest, as an individual, without, hopefully losing your shirt.There is a handy quiz to find out just how high (or low) your tolerance to risk is and based on this, the book continues to explain all the fundamentals about investing wisely.This book is written for a novice and the terms used are everyday and easy to understand. This book also describes the various financial terms that are used in the market and this feature was quite helpful.While I enjoyed this book, it focused more on families and less on singles - which is something that I was interested in. Also, this book's audience definitely is novice as there is very little in the way of intermediate financial information.This is a great book for somebody who is starting out or who needs to polish their knowledge.
jonasreads on LibraryThing More than 1 year ago
Practical primer that addresses immediate investor concerns and questions. I especially enjoyed the straightforward elements in each chapter, such as specific questions and answers to money problems; self-assessments on, for example, risk tolerance; and easy-to-use financial formulas (e.g., tax implications of selling too soon).
rosswirth42 on LibraryThing More than 1 year ago
Excellent introduction to personal investing and family finances. Explains a wide range of investment vehicles while recommending a conservative, long-term approach to wealth building. One interesting chapter is the "lazy investor portfolio planner." This chapter leads the reader through a series of questions that focus on the essentials of balance sheet valuation for your personal situation and an investment strategy that fits where you are in your stage of life.
madamlibbytellsall on LibraryThing More than 1 year ago
An excellent starting point for anyone with questions about the basics of investing. Kristof starts off with a chapter on finding the money to invest and how to change attitudes toward saving and investing. She includes tips for addressing universal problems as well as guidance on gender specific money problems ("emotional spending" for women and "competing with strangers" for men). One of the most informative parts of the book was the section in chapter 8 about "How to Read a Financial Statement." Even after years of reading those closely printed statements they can be overwhelming. Kristof tells you which sections to look at and what to look for to determine if the company is worth investing in. Chapter 14 - "The Lazy Investor's Portfolio Planner" shows you how to put all the lessons together to determine your goals and how to reach them. Simply a well written and accessable guide to taking those first steps into investing and what to do once you get there.
NQTBradyBunch on LibraryThing More than 1 year ago
The book is entitled Investing 101 (revised and updated), and what an appropriate title. I have been teaching my 14-year-old some of the ins and outs of investing, and this is a sound resource for us to have on hand. Whether the reader knows nothing about investing, or has been dabbling for some time now, there is something to be learned--or, at least reminded--from this book. Concepts such as diversifying a portfolio are demonstrated with real numbers and percentages of gains and losses, reflecting the differences (between a diversified and not-so-diversified portfolio) in a way that I had never seen done so well.It's the basics, and more; in layman's terminology with excellent examples. Couldn't recommend it more!
DrMcDougall on LibraryThing More than 1 year ago
As the title says, this is definitely structured as a basic personal finance book, to assist those who wish to understand the incoming and outgoing process, in a very hands-on, non-technical approach. Beneficial to all as a good resource to check on various aspects of the financial jungle, as we attempt to balance our budgets - maybe the government should read this book!
foof2you on LibraryThing More than 1 year ago
Investing 101 is a great book for anyone whether just starting out or you have been investing for a while and need to refresh what you know. This book explains many different aspects of investing. The explanations are easy to follow and detailed. there are however, a couple of drawbacks with the book. First if the book came out today in Dec 2008 the examples of the worst and best days of the stock market would be different. Secondly many of the examples deal with inflation. I wish this book would talk about how to prepare for recessions, depressions and other calamities that could hit. How can someone prepare for any impending financial crisis would be nice if only a few pages. Finally the problem with a book like this is that the information can become dated. i imagine that if I had read this book a year ago the information would have been dead on and the example would have been great. Today one just does not know how the market will go.
Anonymous More than 1 year ago
This book makes it easy to understand the stock market and different investment options. It has great advice and worksheets that guide you through the process. Enlightening.
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Guest More than 1 year ago
The author has made the material very easy to understand, especially for the average person that has never been exposed to the investment process and the terminology used. The book awakens an individual's curiosity about the daily happenings in the stock market.