If You're So Smart, Why Aren't You Rich? : A Guide to Investing Fundamentals

Football is often described as a game of inches. First downs, scoring, and in/out of bound decisions that can determine the outcome of the game may even come down to fractions of an inch. Investing is similar: the difference between outperforming or underperforming the market may be a few fractions of a percentage point. As Ben Branch succinctly states, successful investing, defined as outperforming the market averages, is not easy. And yet it is very much a game worth playing, particularly if you win. The key to being on the winning side is to understand the fundamental principles of investing—what it is and how it works—before making any decision. In this highly practical, non-technical guide, Branch introduces the reader to stocks, bonds, options, mutual funds, real estate, futures, and all of the other basic elements of the market. He debunks popular myths and misconceptions about investing and shows you how to avoid mistakes in order to invest wisely. An extensive glossary, definitions and examples, and lists of dos and don'ts will make this book a handy resource for the novice as well as for seasoned investors looking to take their game to the next level. In this highly practical, non-technical guide, Branch provides the building blocks of a multi-dimensional investing approach. First, he reviews the principle of compound interest, the foundation of all investment strategy and performance. Then, arguing that successful investing is a function of three types of activities—selection, timing, and execution—he introduces the reader to stocks, bonds, options, mutual funds, real estate, futures, and all of the other elements of the market. In addition to covering well-known investments in detail, he explains lesser-known opportunities, such as bankruptcies and takeovers. Special topics include the effects of macroeconomic trends and the subtleties of timing for maximum advantage. He debunks popular myths and misconceptions about investing and shows you how to avoid mistakes in order to invest wisely. An extensive glossary, definitions and examples, and lists of dos and don'ts will make this book a handy resource for the novice, as well as for seasoned investors looking to take their game to the next level. Football is often described as a "game of inches"--scoring, first downs, and in/out of bound decisions that can determine the outcome of the game frequently come down to a matter of inches, or even fractions of an inch. Investing is similar: the difference between outperforming or underperforming the market may turn out to be a few fractions of a percentage point. Drawing from over 30 years in teaching, researching, and practicing investment fundamentals, Ben Branch succinctly states, "successful investing, defined as outperforming the market averages, is not easy. And yet it is very much a game worth playing, particularly if you win." The key to being on the winning side is to understand the basic principles of investing--what it is and how it works--before making any decisions. In this highly practical, nontechnical guide, Branch provides the building blocks of a multidimensional investing approach. First, he reviews the principle of compound interest, the foundation of all investment strategy and performance. Then, arguing that successful investing is a function of three types of activities--selection, timing, and execution--he introduces the reader to stocks, bonds, options, mutual funds, real estate, futures, and all of the other elements of the market. In addition to covering well-known investments in detail, he explains lesser-known opportunities, such as bank ruptcies and takeovers. Special topics include the effects of macroeconomic trends and the subtleties of timing for maximum advantage. He debunks popular myths and misconceptions about investing and shows you how to avoid mistakes in order to invest wisely. An extensive glossary, definitions and examples, and lists of "dos"and "don'ts" will make this book a handy resource for the novice or seasoned investor looking to take their game to the next level. Investment mechanics Securities Options: puts and calls Sources of credit Tax sheltered accounts Investment selection General investment selection Mutual funds, closed end funds, and other types of investment funds Investing in the debt market Bankruptcy investing Takeovers and risk arbitrage Rights offerings and share buybacks Investing in real estate Market timing Macroeconomic trends Timing strategies that don't work Potentially useful timing rules Rules for short selling Rules for the futures market.