Title Page
Copyright Page
Table of Contents
Introduction
About This Book
Foolish Assumptions
Icons Used in This Book
Beyond the Book
Where to Go from Here
Book 1: Getting Started with Investing
Chapter 1: Exploring Your Investment Choices
Getting Started with Investing
Building Wealth with Ownership Investments
Entering the stock market
Owning real estate
Generating Income from Lending Investments
Considering Cash Equivalents
Choosing Where to Invest and Get Advice
Finding the best fund companies and brokers
Finding an acceptable advisor
Chapter 2: Weighing Risks and Returns
Evaluating Risks
Market-value risk
Individual-investment risk
Purchasing-power risk (also known as inflation risk)
Career risk
Analyzing Returns
The components of total return
Savings and money market account returns
Bond returns
Stock returns
Real estate returns
Compounding Your Returns
The value of getting a few extra percent
Considering your goals
Chapter 3: The Workings of Stock and Bond Markets
How Companies Raise Money through the Financial Markets
Deciding whether to issue stocks or bonds
Taking a company public: Understanding IPOs
Understanding Financial Markets and Economics
Driving stock prices through earnings
Weighing whether markets are efficient
Moving the market: Interest rates, inflation, and the Federal Reserve
Book 2: Investing in Your 20s and 30s
Chapter 1: Using Investments to Accomplish Your Goals
Setting and Prioritizing Your Shorter-Term Goals
Accumulating a rainy-day fund
Saving for large purchases
Investing for a small business or home
Saving for kids’ higher educational costs
Investing short-term money
Investing in Retirement Accounts
Understanding retirement account perks
Grappling with retirement account concerns
Taking advantage of retirement accounts
Surveying retirement account choices
Selecting retirement account investments
Chapter 2: Minimizing Your Taxes When Investing
Understanding Investment Taxes
Tracking taxation of investment distributions
Determining your tax bracket
Devising tax-reduction strategies
Reducing Your Taxes When Selling Investments
Weighing nontax issues
Tuning in to tax considerations
Chapter 3: Laying Out Your Financial Plans
First Priorities: Paying Off High-Cost Debt and Building a Safety Reserve
Paying off high-cost consumer debt
Establishing an emergency reserve
What about Paying Down Other Debts?
Assessing student loans
Considering paying down mortgage debt
Sorting Out Your Financial Plans
Considering your investment options and desires
Assessing your savings rate
Investing regularly with dollar cost averaging
Knowing the Impact of Investing for College Costs
Paying for college
Considering educational savings account options
Investing money earmarked for college
Securing Proper Insurance
Chapter 4: Starting Out with Bank and Credit Union Accounts
Understanding FDIC Bank Insurance
Investing in Banking Account and Savings Vehicles
Bank checking accounts and debit cards
Savings accounts and certificates of deposit
Negotiating with Bankers
Feeling Secure with Your Bank
Evaluating any bank
Protecting yourself when banking online
Exploring Alternatives to Bank Accounts
Credit union accounts and benefits
Brokerage cash management accounts
Money market mutual funds
Book 3: Checking Out Stock Investing
Chapter 1: Gathering Information on Stocks
Looking to Stock Exchanges for Answers
Grasping the Basics of Accounting and Economics
Accounting for taste and a whole lot more
Understanding how economics affects stocks
Staying on Top of Financial News
Figuring out what a company’s up to
Discovering what’s new with an industry
Knowing what’s happening with the economy
Seeing what politicians and government bureaucrats are doing
Checking for trends in society, culture, and entertainment
Reading (And Understanding) Stock Tables
52-week high
52-week low
Name and symbol
Dividend
Volume
Yield
P/E
Day last
Net change
Using News about Dividends
Looking at important dates
Understanding why certain dates matter
Evaluating Investment Tips
Chapter 2: Investing for Long-Term Growth
Becoming a Value-Oriented Growth Investor
Choosing Growth Stocks with a Few Handy Tips
Looking for leaders in megatrends
Comparing a company’s growth to an industry’s growth
Considering a company with a strong niche
Checking out a company’s fundamentals
Evaluating a company’s management
Noticing who’s buying and/or recommending a company’s stock
Making sure a company continues to do well
Heeding investing lessons from history
Chapter 3: Investing for Income and Cash Flow
Understanding the Basics of Income Stocks
Getting a grip on dividends and dividend rates
Recognizing who’s well-suited for income stocks
Assessing the advantages of income stocks
Heeding the disadvantages of income stocks
Analyzing Income Stocks
Pinpointing your needs first
Checking out yield
Looking at a stock’s payout ratio
Studying a company’s bond rating
Diversifying your stocks
Exploring Some Typical Income Stocks
It’s electric! Utilities
An interesting mix: Real estate investment trusts (REITs)
Business development companies (BDCs)
Chapter 4: Using Basic Accounting to Choose Winning Stocks
Recognizing Value When You See It
Understanding different types of value
Putting the pieces together
Accounting for Value
Breaking down the balance sheet
Looking at the income statement
Tooling around with ratios
Book 4: Looking at Bond Investing
Chapter 1: Bond Fundamentals
Understanding What Makes a Bond a Bond
Choosing your time frame
Picking who you trust to hold your money
Differentiating among bonds, stocks, and collectibles
Why Hold Bonds?
Identifying the best reason to buy bonds: Diversification
Going for the cash
Introducing the Major Players in the Bond Market
Buying Solo or Buying in Bulk
Picking and choosing individual bonds
Going with a bond fund or funds
The Triumphs and Failures of Fixed-Income Investing
Beating inflation, but not by very much
Saving the day when the day needed saving
Gleaning some important lessons
Realizing How Crucial Bonds Are Today
Viewing Recent Developments, Largely for the Better
Chapter 2: All about the Interest
The Tricky Business That Is Calculating Rates of Return
Cutting deals
Changing hands
Embracing the complications
Measuring the Desirability of a Bond
Level one: Getting the basic information
Level two: Finding out intimate details
Level three: Examining the neighborhood
Understanding Yield
Coupon yield
Current yield
Yield-to-maturity
Yield-to-call
Worst-case basis yield
The 30-day SEC yield
Recognizing Total Return (This Is What Matters Most!)
Figuring in capital gains and losses
Factoring in reinvestment rates of return
Allowing for inflation adjustments
Pretax versus post-tax
Measuring the Volatility of Your Bond Holdings
Time frame matters most
Quality counts
The coupon rate matters, too
Returning to the Bonds of Babylonia
Chapter 3: Checking Out Types of Bonds
Exploring the Many Ways of Investing with Uncle Sam
Savings bonds
Treasury bills, notes, and bonds
Treasury Inflation-Protected Securities (TIPS)
Industrial Returns: Corporate Bonds
Comparing corporate bonds to Treasuries
The crucial credit ratings
Special considerations for investing in corporate debt
The volatility of high-yield bonds
Lots of Protection, a Touch of Confusion: Agency Bonds
Identifying the bond issuers
Sizing up the government’s actual commitment
Eyeing default risks, yields, markups, and more
Weighing taxation matters
Banking Your Money on Other People’s Mortgages
Bathing in the mortgage pool
Deciding whether to invest in the housing market
(Almost) Tax-Free Havens: Municipal Bonds
Sizing up the muni market
Comparing and contrasting with other bonds
Delighting in the diversification of municipals
Choosing from a vast array of possibilities
Chapter 4: Investing (Carefully!) in Individual Bonds
Navigating Today’s Individual Bond Market
Getting some welcome transparency
Ushering in a new beginning
Dealing with Brokers and Other Financial Professionals
Identifying the role of the middleman
Do you need a broker or agent at all?
Selecting the right broker or agent
Checking the dealer’s numbers
Hiring a financial planner
Doing It Yourself Online
If you’re looking to buy
If you’re looking to sell
Perfecting the Art of Laddering
Protecting you from interest rate flux
Tinkering with your time frame
Chapter 5: Picking a Bond Fund That Will Serve You for Life
Defining the Basic Kinds of Funds
Mining mutual funds
Considering an alternative: Closed-end funds
Establishing a position in exchange-traded funds
Understanding unit investment trusts
Taking a flyer (or not) on an exchange-traded note
What Matters Most in Choosing a Bond Fund of Any Sort
Selecting your fund based on its components and their characteristics
Pruning out the underperformers
Laying down the law on loads
Sniffing out false promises
Book 5: Moving on to Mutual Funds and Exchange-Traded Funds
Chapter 1: Considering Mutual Funds’ Pros and Cons
Introducing Mutual Funds and Exchange-Traded Funds
Getting a Grip on Funds
Financial intermediaries
Open-end versus closed-end funds
Opting for Mutual Funds
Fund managers offer expertise
Funds save you money and time
Fund diversification minimizes your risk
Funds undergo regulatory scrutiny
You choose your risk level
Fund risk of bankruptcy is nil
Funds save you from sales sharks
You have convenient access to your money
Addressing the Drawbacks
Don’t worry about these . . .
Worry about these (but not too much) . . .
Chapter 2: Finding the Best Mutual Funds
Evaluating Gain-Eating Costs
Losing the load: Say no to commissions
Considering a fund’s operating expenses
Weighing Performance and Risk
Star today, also-ran tomorrow
Apples to apples: Comparing performance numbers
Recognizing Manager Expertise
Chapter 3: Buying Mutual Funds from the Best Firms
Finding the Best Buys
The Vanguard Group
Fidelity Investments
Dodge & Cox
Oakmark
T. Rowe Price
TIAA
USAA
Other fund companies
Discount Brokers: Mutual Fund Supermarkets
Buying direct versus discount brokers
Debunking “No Transaction Fee” funds
Using the best discount brokers
Places to Pass By
Chapter 4: What the Heck Is an ETF, Anyway?
The Nature of the Beast
Choosing between the Classic and the New Indexes
Preferring ETFs over Individual Stocks
Distinguishing ETFs from Mutual Funds
Why the Big Boys Prefer ETFs
Trading in large lots
Savoring the versatility
Why Individual Investors Are Learning to Love ETFs
The cost advantage: How low can you go?
Uncle Sam’s loss, your gain
What you see is what you get
Getting the Professional Edge
Passive versus Active Investing: Your Choice
The index advantage
The allure of active management
Why the race is getting harder to measure . . . and what to do about it
Do ETFs Belong in Your Life?
Calculating commissions
Moving money in a flash
Understanding tracking error
Making a sometimes tricky choice
Chapter 5: Risk Control, Diversification, and Other Things to Know about ETFs
Risk Is Not Just a Board Game
The trade-off of all trade-offs (safety versus return)
So just how risky are ETFs?
Smart Risk, Foolish Risk
How Risk Is Measured
Standard deviation: The king of all risk measurement tools
Beta: Assessing price swings in relation to the market
Mixing and Matching Your Stock ETFs
Filling in your style box
Buying by industry sector
Don’t slice and dice your portfolio to death
Book 6: Investing Online
Chapter 1: Getting Ready for Online Investing
Why Investing Online Is Worth Your While
Getting Started
Gut-Check Time: How Much Risk Can You Take?
Passive or Active? Deciding What Kind of Investor You Plan to Be
How to know if you’re a passive investor
Sites for passive investors to start with
How to know whether you’re an active investor
Sites for the active investor to start with
Chapter 2: Getting Your Device Ready for Online Investing
Turning Your Device into a Trading Station
Using favorites to put data at your fingertips
Putting key mobile apps a touch away
Compiling a list of must-watch sites
Tracking the Market’s Every Move
Getting price quotes on markets and stocks
Slicing and dicing the markets
Your crystal ball: Predicting how the day will begin
Getting company descriptions
Keeping tabs on commodities
Tracking bonds and U.S. Treasuries
Monitoring Market-Moving News
Financial websites
Traditional financial news sites
Checking In on Wall Street Chatter
Everyone is an expert: Finding blogs
Getting in tune with podcasts
Taming Twitter
Keeping Tabs on the Regulators
Searching the Internet High and Low
Keeping the Bad Guys Out: Securing Your PC
Mastering the Basics with Online Tutorials and Simulations
Online tutorials
Simulations
Chapter 3: Connecting with an Online Broker
Finding the Best Broker for You
The nine main factors to consider
Gotchas to watch out for
Separating the Types of Brokerages
Paying the minimum with a deep discounter
Getting more with a discounter
Full-service traditional
Avoiding Hidden Fees
Finding Out What Reviewers Think
Is Your Money Safe? Checking Out Your Broker
Cutting the Cord: Mobile Trading
Pay Attention to Where Your Cash Is Parked: Money Market Funds
Buying Stocks and Mutual Funds without a Broker
Stocks: Direct investments
Mutual funds: Straight from the mutual fund company
Opening and Setting Up Your Account
The checklist of what you need to know
The checklist of what you need to have
Chapter 4: Entering and Executing Trades
Understanding How Stock Trades and Shares Are Handled
Ways you can hold your investments
A second in the life of a trade
Getting It Done: Executing Your Trades
Surveying types of orders
Checking out costs of different orders
Tailoring your trades even more
Book 7: Introducing Fundamental Analysis
Chapter 1: Understanding Fundamental Analysis
Why Bother with Fundamental Analysis?
Some of the real values of fundamental analysis
Driving home an example
Putting fundamental analysis to work
Knowing what fundamentals to look for
Knowing what you need
Knowing the Tools of the Fundamental Analysis Trade
Staying focused on the bottom line
Sizing up what a company has to its name
Burn, baby, burn: Cash burn
Financial ratios: Your friend in making sense of a company
Making Fundamental Analysis Work For You
Using fundamentals as signals to buy or sell
The perils of ignoring the fundamentals
Using fundamental analysis as your guide
Chapter 2: Getting Up to Speed with Fundamental Analysis
What Is Fundamental Analysis?
Going beyond betting
Understanding how fundamental analysis works
Knowing who can perform fundamental analysis
Following the money using fundamentals
Comparing Fundamental Analysis with Other Ways of Picking Investments
How fundamental analysis stacks up against index investing
Comparing fundamental analysis with technical analysis
Putting Fundamental Analysis to Work For You
How difficult is fundamental analysis? Do you need to be a math wizard?
Is fundamental analysis for you?
The risks of fundamental analysis
Making Money with Fundamental Analysis
Putting a price tag on a stock or bond
Being profitable by being a “contrarian”
The Fundamental Analysis Toolbox
Introducing the income statement
Balance-sheet basics
Getting the mojo of cash flows
Familiarizing yourself with financial ratios (including the P-E)
Chapter 3: Gaining an Edge with Fundamental Analysis
Better Investing with Fundamentals
Picking stocks for fundamental reasons
Dooming your portfolio by paying too much
Sitting through short-term volatility
Relying on the Basic Info the Pros Use
What is “the Warren Buffett Way”?
Checking in on Graham and Dodd
Figuring Out When to Buy or Sell a Stock
Looking beyond the per-share price
Seeing how a company’s fundamentals and its price may get out of alignment
Avoiding overhyped “story stocks”
Pairing buy-and-hold strategies with fundamental analysis
Looking to the long term
Knowing that patience isn’t always a virtue
Chapter 4: Getting Your Hands on Fundamental Data
Getting in Sync with the Fundamental Calendar
Which companies must report their financials to the public?
Kicking it all off: Earnings season
Getting the earnings press release
Bracing for the 10-Q
Running through the 10-K
Flipping through the annual report
There’s no proxy like the proxy statement
Getting Up to Speed with Basic Accounting and Math
Operating activities: Finding smooth operators
Investing activities: You have to spend money to make money
Financing activities: Getting in tune with high finance
Undestanding a key fundamental math skill: Percentage changes
Knowing How to Get the Fundamental Data You Need
Getting acquainted with the SEC’s database
Accessing company fundamentals using EDGAR
Finding stocks’ dividend histories
Getting stock-split information
Book 8: Investing in Real Estate
Chapter 1: Evaluating Real Estate as an Investment
Understanding Real Estate’s Income- and Wealth-Producing Potential
Recognizing the Caveats of Real Estate Investing
Comparing Real Estate to Other Investments
Returns
Risk
Liquidity
Capital requirements
Diversification value
Opportunities to add value
Being aware of the tax advantages
Determining Whether You Should Invest in Real Estate
Do you have sufficient time?
Can you deal with problems?
Does real estate interest you?
Can you handle market downturns?
Fitting Real Estate into Your Plans
Ensuring your best personal financial health
Protecting yourself with insurance
Considering retirement account funding
Thinking about asset allocation
Chapter 2: Covering Common Real Estate Investments
Identifying the Various Ways to Invest in Residential Income Property
Buying a place of your own
Converting your home to a rental
Investing and living in well-situated fixer-uppers
Purchasing a vacation home
Paying for timeshares and condo hotels
Surveying the Types of Residential Properties You Can Buy
Single-family homes
Attached housing
Apartments
Considering Commercial Real Estate
Buying Undeveloped or Raw Land
Chapter 3: Identifying Sources of Capital
Calculating the Costs of Admission
Forgetting the myth of no money down
Determining what you need to get started
Rounding Up the Required Cash by Saving
Overcoming Down Payment Limitations
Changing your approach
Tapping into other common cash sources
Chapter 4: Location, Location, Value
Deciding Where to Invest
Finding Properties to Add Value
Evaluating a Region: The Big Picture
Population growth
Job growth and income levels
Investigating Your Local Market
Supply and demand
Focusing on the path of progress
Considering barriers to entry
Government’s effect on real estate
Evaluating Neighborhoods
Schools
Crime rates
Pride of ownership
Role play: What attracts you to the property?
Mastering Seller’s and Buyer’s Markets
Understanding real estate cycles
Timing the real estate market
Book 9: Investing in Trends
Chapter 1: Taking the Nickel Tour of Cannabis Investing
Weighing the Pros and Cons of Investing in Cannabis
Pros
Cons
Investing in Businesses That Touch the Plant or Those That Don’t
Exploring Your Investment Options
Starting your own business
Investing in cannabis real estate
Buying and selling stocks
Diversifying with exchange-traded funds and mutual funds
Considering private investment opportunities
Finding Investment Opportunities
Researching Investment Opportunities
Planning Your Investment Strategy
Investing in a Cannabis Business
Chapter 2: The Political, Cultural, and Regulatory Landscape of Cannabis Investing
Recognizing the Impact of Laws on the Industry
Getting up to speed on U.S. federal law and enforcement
Brushing up on state cannabis laws
Considering local laws, too
Examining cannabis laws in other countries
Riding the Waves of Politics and Culture
Checking the nation’s pulse
Debunking misconceptions of cannabis and users
Examining activism
Tuning into cannabis culture
Accounting for the High Costs of Doing Business
Regulatory and compliance costs
Federal, state, and local taxes
Security costs
Chapter 3: What Is a Cryptocurrency?
Beginning with the Basics of Cryptocurrencies
The definition of money
Some cryptocurrency history
Key crypto benefits
Common crypto and blockchain myths
Risks
Gearing Up to Make Transactions
Wallets
Exchanges
Communities
Making a Plan Before You Jump In
Select your cryptos
Analyze, invest, and profit
Chapter 4: How Cryptocurrencies Work
Explaining Basic Terms in the Cryptocurrency Process
Cryptography
Nodes
Mining
Proof-of-work
Proof-of-stake
Proof-of-importance
Transactions: Putting it all together
Cruising through Other Important Crypto Concepts
Adaptive scaling
Decentralization
Harvesting
Open source
Public ledger
Smart contracts
Stick a Fork in It: Digging into Cryptocurrency Forks
What is a fork, and why do forks happen?
Hard forks and soft forks
Free money on forks
Chapter 5: Entering the World of ESG Investing
Surveying the Current ESG Landscape
Exploring What ESG Is (and Isn’t)
Defining the breadth of ESG
Comparing SRI, ethical, and impact investing to ESG
Determining whether ESG delivers good investment performance
Understanding ESG’s Impact on the Environment, Society, and Governance
Meeting environmental and global warming targets
Providing solutions to social challenges
Meeting corporate governance requirements
Using International Standards to Determine ESG Objectives
Leading the charge: European legislation on ESG
Ahead of its time: The United Nations
Staying focused: The Sustainability Accounting Standards Board
Building a framework: The Global Reporting Initiative
Index
EULA