Friday, January 11, 2013
Resolve to Fatten Up in 2013
For those of us who have little or no experience with the stock market, the best beginning is an introductory work on investment. Getting Started In Stock Investing and Trading by Michael C. Thomsett is one example, or the ubiquitous Dummies series has a volume on investing. Beginning books on investing usually cover current ratio, price/earnings ratio and other aspects of fundamental analysis. Some technical analysis topics such as support and resistance will probably also be touched upon.
I personally suggest picking up a basic book that also explains “paper trading.” Paper trading is a system of simulated trading using a system of your choosing. There are multiple advantages to paper trading. One, you learn how the markets work. Two, you learn how to trade without having to pay a broker or service for the trades. Third, you gain this experience without any risk of losing your hard earned money. Thomsett’s book not only explains “paper trading” but actually lists several websites that offer free stock simulators.
I mentioned choosing a system for paper, or practice, trading. Here at the Business, Science & Technology department we have a host of investing books which explain different investing methods and philosophies. These run the gamut from highly technical, such as books explaining the candlestick method, to more philosophical, like the Wall Street Journal Guide to Investing in the Apocalypse.
After whetting your chops on stocks, you might want to dip into more exotic investments. The Business, Science & Technology Department of the Birmingham Public Library has a large selection of books on various investments: real estate, precious metals, bonds, hedge funds, index funds, penny stocks, currency trading and options. (Caveat emptor. With some of the more complex investment methods you run the risk of losing not only your initial investment, but additional monies as well.) Who knows, perhaps you’ll be successful enough with this year’s resolution that your 2014 resolution will be to quit your day job and become a day trader.
Submitted by David Ryan
Business, Science & Technology Department