WASHINGTON: Investing 101 – the revised edition – is based on a six-week adult education course I taught back in the 1980s at a local community college. I was a stockbroker at the time and wanted to explain the complicated thicket of individual investing in stocks and bonds to folks interested in broadening their portfolios.
To my surprise and delight, the course – the live version of what I now call Investing 101 – proved quite popular. As a result I offered it many times until I chose to leave the business. My departure was due to what I felt at the time was the investing industry’s profound unfairness toward the average retail investor.
To be perfectly honest, over the past couple of decades, this unfairness has actually gotten considerably worse. The “whys” involve a variety of reasons, most of which I cover on an almost daily basis in my CDN financial columns. But I worry sometimes that, since I’m often forced to use investment community jargon, my readers and/or potential readers might not fully grasp what I’m writing about.
Are you worried you won’t have enough money for retirement, education or even vacation travel in the coming years? Investing 101 – the series – aims to help you acquire and grow the assets you’ll likely need to solve these problems. And more.
I think that if a small investor knows what’s going on underneath the stats, reports and TV talking heads, he or she can often read the tea leaves. That helps to avoid getting trapped by Wall Street’s cadre of well-heeled thieves.
Caveat: Despite these wealthy crooks, you still have to believe in rough and tumble capitalism to survive and sometimes prosper in this business. In my opinion, if you want to wage social justice wars in your own portfolio, you’ll end up a loser in the end. Successful investing is diffident and a tad amoral. It’s about making money not changing the world. (You can do that later with all the money you make as a savvy investor.)
So leave your prejudices at home. Learn how the system works (or sometimes doesn’t). That’s because if you know how it works, and if you acquire the tactics and weapons to win in this game, you’ll almost certainly be better off in 10 years than you are today.
Ultimately, that’s the aim of Investing 101: To give the average investor a fighting chance to make some money. Yes, it can be done and you can do it. But oftentimes, it’s trickier than ever if you don’t have a supercomputer in your spare bedroom. But you can still get around much of this nonsense.
In the coming weeks and months, I’ll define and explore the following topics in some detail but not necessarily in order, along with their associated sub-topics.
- Stocks and bonds
- Market averages
- Mutual funds (load and no-load)
- ETFs and ETNs
- How markets work (or don’t)
- Precious metals and alternative investments
- Investment objectives, techniques and strategies
I’ll try to keep things short, simple and interesting. Many of the topics Investing 101 covers have varying degrees of complexity we won’t get into. But that’s not a problem. There are other places where you can find more detailed information and I’ll let you know where they are and/or provide useful links.
Again, much has changed since I last offered this course ages ago. Back in the 1980s for the retail investor, there were no such things as:
- Online investing via personal computer or otherwise
- ETFs or ETNs
- “Short” ETFs that take the place of shorting stocks or stock sectors
- ETFs that stand in for commodities or commodity futures
- High-frequency Trading or Traders (HFTs)
- Really cheap commissions
- A completely ineffective SEC
- Crypto currencies
All these and more have changed the tone, tactics and techniques of investing in recent years, particularly during and after the Great Recession. That stock market and real estate Super Slam allegedly ended in 2009-2010. But for many American investors, it’s still ongoing, as I can well attest. (More on that in a later column.)
As a result, I’ve been revising Investing 101 to keep up with all these changes and more as they transpire. So as I write and then post the articles in these series, I’ll strive to present the most up-to-date information available. At the moment. That’s because investing is ultimately a movable feast. Even the professionals must remain alert to subtleties and read extensively to stay ahead of the crowd.
If the exciting (and sometimes heartbreaking) world of investing is something you want to learn more about, check back here from time to time for my up-to-the-minute Investing 101 installments. I hope to post them about once every week to 10 days, depending on how busy our current tumultuous market forces me to be.
After all, I am still an active investor. I could use some company.
Have a good weekend. I’ll get started on the nit and the grit in my next installment.