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I'm a very busy person (full-time job, family, etc) and want to invest over $50k of extra cash. There are so many ways that I can learn, but which ones will bear fruit? I am willing to pay money to learn to make money or have access to systems that help make money.

Here are the ideas that I have considered:

  1. Read books
  2. Watch videos
  3. Read blogs
  4. Paper trades
  5. Hire a coach
  6. Hire a financial planner
  7. Buy and learn analytical software (AmiBroker, OptionVue, etc)

Also, a list of topics I have considered:

  1. Emotion management
  2. Designing a personalized system (ie logging trades, having exit strategies, etc)
  3. Technical Analysis
  4. Fundamental Analysis
  5. Options
  6. Precious Metals (other commodities)
  7. Bonds
  8. Taxes

I'm beginning to realize that it may be best to just pick a few of these and go. There are a million good opportunities/day that are lost. I may just need one good opportunity per a year. Also, I'm a really slow reader so books tend to take much more time for me (unless it's an audio book).

Where have people here had the most success?

  • By $50K "extra" cash, are you implying that's above and beyond already fully-funded retirement accounts? Or, does that 50K represent your retirement investment assets as well? – Chris W. Rea May 26 '10 at 17:04
  • I have a pension so "fully-funded" is difficult to determine. – Benjamin May 28 '10 at 18:15
4

All the things you suggest are good, but I think like everything else the key is practice. Study some topics, then try them out. There are many many sites out there that have free or cheap virtual trading.

  • I think paper trading (with Excel or real paper and pen) is good because it forces you to think through each step. You can learn more than by just using a paper trading site. – B Seven Nov 26 '11 at 1:31
  • You may want to try MBtrading. I have had good experience and they offer paper trading though a "practice account". – B Seven Nov 26 '11 at 1:33
4

First, you need to figure out what your objectives for the money are. Mostly, this boils down to how soon you are going to need the money. If you are, as you say, very busy and you don't need the money until retirement, I'd suggest putting your money in a single target date fund, such as the BlackRock LifePath fund. You figure out when you are going to retire, and put your money in that fund. The fund will then pick a mix of stocks, bonds, and other investments, adjusting the risk for your time horizon.

Maybe your objectives are different, and you want to become an trader. You value being able to say at a BBQ, "oh, I bought AAPL at $20", or "I think small caps are over valued". I'd suggest you take your $50,000, and structure it so you invest $5,000 a year over 10 years. Nothing teaches you about investing like making or losing a bit of money in the market. If you put it all in at once, you risk losing it all - well before you've learned many valuable lessons which only the market can teach you.

I'd suggest you study the Efficient-market hypothesis before studying specific markets or strategies.

3

Given what you state you should shop around for an advisor. Think of the time required to pursue your strategies that you list? They already have studied much of what you seek to learn about.

Any good investor should understand the basics. This is Canadian based but many of the concepts are universal. Hope you find it helpful.

http://www.getsmarteraboutmoney.ca/Pages/default.aspx

  • My credit union had a free financial adviser. You can start there; it helped me to understand what to look for when searching for a financial adviser without costing me anything. It was just a nice place to start the search. – MrChrister May 26 '10 at 19:52
  • An adviser won't teach you anything. In fact, they will probably try to convince you that you can't learn to invest. – B Seven Nov 26 '11 at 1:34

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