Ask the Readers: Where to Start With the Stock Market?
Jono is ready to dive into stock investing, but he doesn't know where to begin:
I currently attend UCLA and am just a first year (undergraduate), but I am extremely interested in investing in stocks after reading some of your articles. Doesn't hurt to start early right? I am skeptical as to how to start the process though, and I don't really want to turn to my parents because I don't feel like they have had that much success in that area.
Are there any good novice stock investing books I could read? I'm not entirely sure what is necessary to be successful in the stock market. I read everyday on the technology industry. Does knowing current events about the area you want to invest in important? (I would think so) I came upon Virtual Stock Exchange recently, and it looks like a good resource to just get a handle of it. Have you ever used it before?
Basically, I am just looking for advice on how to start investing in stocks.
I offered a brief reply via e-mail, and promised Jono that I'd let you readers offer your advice, too.
First, I think it's great that he's making this move at such a young age. Compound returns favor the young — the best time for anyone to start an investment program is now — and by investing just a couple thousand dollars a year for the next decade or so, Jono will have a terrific head-start on his peers.
Second, I recommended The Only Investment Guide You'll Ever Need and The Bogleheads' Guide to Investing as good books about the subject. The former is more approachable, but the latter is more comprehensive.
Finally, I pointed out that successful investing is not sexy. A good investor generally buys boring stocks and holds them for a long time, rarely selling. The easy path to success is simply to stick your money in an index fund. It's boring, boring, boring, but chances are it will make you rich.
What words of wisdom do you have to offer a young person just getting started in stocks?