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Published:
May 3, 2022

Investing All-in-One For Dummies

Overview

Make the most of your investment portfolio with a mix of assets from stocks to real estate to cryptocurrency

There’s nothing more satisfying than seeing the balance of a financial account grow month over month. But before that can happen, you need to know the best places to invest your money. Who can you trust for solid, reliable investing advice?

Investing All-in-One For Dummies offers sound guidance for investors at every level. Whether you’re stumped by stocks, baffled by bonds, mystified about mutual funds, or curious about cryptocurrency, this book gives you a solid foundation in those investing concepts and many others. After reading the expert advice and considering your risk tolerance and timeline, you can confidently choose the best investments for your financial goals.

Containing advice from 10 different Dummies investing guides, Investing All-in-One For Dummies shows you how to:

  • Set short- and long-term investing goals, invest to minimize your tax hit, and develop an investing strategy using a mix of investment vehicles
  • Decide when to buy, hold, or sell an investment
  • Choose the right mix of stocks, bonds, and mutual funds to create a diversified portfolio
  • Identify real estate investment opportunities and find the capital to make purchases
  • Execute trades through an online broker instead of using a traditional investment firm
  • Evaluate modern investing trends like cryptocurrency and environmental, social, and governance (ESG) investing

For anyone who wants to dip their toes into the markets or who tends to leave their investment decisions in the hands of someone else, Investing All-in-One For Dummies is the must-read resource when you’re ready to make informed decisions and pick solid investments for your financial future.

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About The Author

Eric Tyson is a veteran Dummies author of numerous bestselling books in the investing and personal finance space.

Paul Mladjenovic is a Certified Financial Planner and the bestselling author of Stock Investing For Dummies.

Kiana Danial is an investment consultant and trainer and the author of Cryptocurrency Investing For Dummies.

Russell Wild is the author or coauthor of nearly two dozen books, including ETFs For Dummies.

Matt Krantz is a nationally known financial journalist and the author of Online Investing For Dummies.

Robert Griswold is a successful real estate investor and property manager and the co-author of Real Estate Investing For Dummies.

Steven Gormley is a celebrated expert in the legal marijuana sector and author of Investing in Cannabis For Dummies.

Brendan Bradley is a financial market professional and the author of ESG Investing For Dummies.

Sample Chapters

investing all-in-one for dummies

CHEAT SHEET

Money is the biggest component of the investing world, but time comes in a close second. When you combine the two, you have the potential to grow your money into a healthy nest egg. This Cheat Sheet offers some basic investing terminology and advice that will pay off with every dollar you invest.Building wealth with ownership investmentsIf you want your money to grow faster than the rate of inflation over the long term and you don’t mind a bit of a roller-coaster ride from time to time in your investments’ values, ownership investments are for you.

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Articles from
the book

Investing appears to be complicated and complex. But if you can take some relatively simple concepts to heart and adhere to them, you can greatly increase your success.Here are ten time-tested principles of investing success. Following these principles can pay you big dividends (and capital gains) for many years to come.
Saving money from your monthly earnings will probably be the foundation for your real estate investing program. However, you may have access to other financial resources for down payments. Here’s a friendly little reminder: Monitor how much of your overall investment portfolio you place into real estate and how diversified and appropriate your holdings are given your overall goals.
After several years of distributing funds for all these different fund companies, discount brokers came up with an innovation. Discount brokers were doing a lot for mutual fund companies (for instance, handling the purchase and sale of funds as well as the ongoing account recordkeeping and reporting), but they weren’t being paid for all their work.
Most people can succeed at investing in real estate if they’re willing to do their homework, which includes selecting top real estate professionals. Here, we ask several important questions to help you decide whether you have what it takes to succeed and be happy with real estate investments that involve managing property.
Diversification is a big attraction for many investors who choose mutual funds and exchange-traded funds. Here’s an example of why, which should also explain what diversification is all about: Suppose you heard that Phenomenal Pharmaceuticals developed a drug that stops cancer cells in their tracks.You run to the phone, call your broker, and invest all your savings in shares of Phenomenal stock.
Buying real estate in up-and-coming areas with new development or renovated properties not only greatly enhances the ease of finding and keeping good tenants but also leads to higher occupancy, lower turnover, and higher rates of appreciation.In virtually all major cities, some areas are experiencing new construction and growth — and have the reputation of being the area to live in.
Nearly any site or finance app can give you stock quotes for the day. But a few sites deserve special mention because they make it easy to get stock quotes for days in the past and even download them to your computer for further analysis. And because they deserve special mention, they’re getting it right here: MSN Money is handy for looking up prices of stocks and market indexes because it’s fast and gives you everything you need, ranging from the stock’s closing price to how much trading activity there was when dividends (cash payments) were paid to investors.
Companies can borrow or raise money through financial markets. All businesses start small — whether they begin in a garage, a spare bedroom, or a rented office. As companies begin to grow, they often need more money (known as capital in the financial world) to expand and afford their growing needs, such as hiring more employees, buying computer systems, and purchasing other equipment.
As much as Buffett is revered and admired, he, too was a student of fundamental analysis. Buffett has utilized and perfected the tools of professors Benjamin Graham and David Dodd.. Graham and Dodd, whose names are synonymous with a method of investing called value investing, trace their roots to Columbia University, which Buffett attended.
Bond investing can be tricky business indeed — way trickier than stock investing. To help explain why, let’s look at some Babylonian friends, Nabu-usabsi and Nabu-sar-ashesu. And let’s also introduce two new characters, Lila-Ir-lender and Kudur-Broker. The two Nabus are real characters from a bygone era. Lila-Ir-lender (said to be a distant cousin of Hammurabi) is fictional.
Among the mass market website tools and booklets focused on retirement planning, you should try T. Rowe Price’s Retirement Income Calculator. It walks you through the calculations needed to figure how much you should be saving to reach your retirement goal.The assumptions that you plug into this calculator are really important, so here’s a review of the key ones: Asset allocation: Enter your current allocation and then select an allocation for after you’re retired.
The reputation of particular neighborhoods can be based on many factors. If you plan to invest in real estate, this is something to take into consideration. Certain key or essential elements differentiate the neighborhoods with good reputations and positive trends from the areas that are stagnant or trending the wrong direction.
Though you’re advised to think local, any decision about where to invest should start with an evaluation of the overall economic viability and trends of the surrounding region. If the region isn’t economically sound, the likelihood for successful real estate investments within that area is diminished. Understand how to evaluate important economic data so you can invest in the areas that are poised for growth.
If companies make any significant announcements about their investments, they’re required to notify the appropriate government watchdogs, which in most cases is the Securities and Exchange Commission.In fact, the Securities and Exchange Commission site is so easy to navigate that we’re going to show you how to do it right now.
When you think of a stock trading floor, you probably picture a room full of traders wearing brightly colored jackets, throwing papers around, and yelling out market orders. Some of that drama still exists on the New York Stock Exchange floor and in the Chicago futures markets, but it’s largely a throwback from the old days.
The best money market funds enable you to substitute for a bank savings account while offering comparable safety to a bank, but with a better yield. Money market funds are well suited for some of the following purposes: Rainy-day/emergency reserve: Because you don’t know what the future holds, you’re wise to prepare for the unexpected, such as job loss, the desire to take some extra time when changing jobs, unexpected healthcare bills, or a leaky roof on your home.
Money is the biggest component of the investing world, but time comes in a close second. When you combine the two, you have the potential to grow your money into a healthy nest egg. This Cheat Sheet offers some basic investing terminology and advice that will pay off with every dollar you invest.Building wealth with ownership investmentsIf you want your money to grow faster than the rate of inflation over the long term and you don’t mind a bit of a roller-coaster ride from time to time in your investments’ values, ownership investments are for you.
Some real estate investors make the mistake of not continuing to research the economics of their real estate markets after they’ve made their investments. Even if you plan to buy and hold, you need to pay attention to the market conditions. The criteria you should use to consider making decisions about which markets are the best for investing are dynamic and can fluctuate.
As the price of everything from groceries and gas to college tuition and medical care continues to climb, it’s nice to know that at least two things on this planet have gotten cheaper in the past few years: computers and bond trades. And, as any seasoned bond investor will tell you, saving money on trades isn’t the only exciting development of late.
The greatest force all investors have is time. Don't waste it. The sooner you start to save and invest, the more likely you'll be successful.Take the example of five people, each of whom wants to have $1 million in the bank by the time he or she retires at age 65. The first investor starts when she is 20, followed by a 30-year-old, 40-year-old, 50-year-old, and 60-year-old.
Investing might not seem controversial, but it shouldn’t surprise you that anytime you’re talking about money, people have some strong opinions about the right way to do things. The first way investors categorize themselves is by whether they are passive or active. Because these two approaches are so different, the following information helps you think about what they are and which camp you see yourself in.
Although the best funds can be great, there are also drawbacks, and you need to know them, too. After all, no investment vehicle is perfect, and you need to understand fund negatives before you take the plunge.Still, the fund drawbacks that we’re concerned about are different from the ones that some critics like to harp on.
Every year, millions — yes, literally millions — of bonds are issued by thousands of different governments, government agencies, municipalities, financial institutions, and corporations. They all pay interest. In many cases, the interest rates aren’t all that much different from each other. In most cases, the risk that the issuer will default — fail to pay back your principal — is minute.
Where possible, try to save and invest in accounts that offer you a tax advantage, which is precisely what retirement accounts offer you. These accounts — known by such enlightening acronyms and names as 401(k), 403(b), SEP-IRA, and so on — offer tax breaks to people of all economic means. Consider the following advantages to investing in retirement accounts: Contributions often provide up-front tax breaks.
Much is made of who manages a specific mutual fund. Although the expertise of the individual fund manager is important, a manager isn’t an island unto himself (or herself). (And if the fund manager leaves or retires from the company, you’re left holding the fund.) A star fund can flare for its moment of investor glory and then easily twinkle down to become just another average or worse-than-average fund.
Real estate investment offers numerous tax advantages. Here, we compare and contrast investment property tax issues with those of other investments. Deductible expenses (including depreciation) Owning a property has much in common with owning your own small business. Every year, you account for your income and expenses on a tax return.
Money market funds are a safe, higher-yielding alternative to bank accounts. Under Securities and Exchange Commission regulations, money market funds can invest only in the highest-credit-rated securities, and their investments must have an average maturity of less than 60 days. When looking for an outstanding money market fund, look for these attributes: Low expenses: Select a money market fund that does a good job of controlling its expenses.
Before you can invest, you have to have a few extra dollars. But how do you save money with so many unavoidable basic expenses? Investors find ways to be smart about their money, even paying for routine costs. These sites can help you boost your savings: Feed The Pig urges you to stop wasting money and offers tips to help you get out of debt by cutting excess spending.
Companies generally seek to maximize profits and maintain a healthy financial condition. Ultimately, the financial markets judge the worth of a company’s stock or bond. Trying to predict what happens to the stock and bond markets and to individual securities consumes many a market prognosticator.In the 1960s, to the chagrin of some market soothsayers, academic scholars developed a theory called the efficient market hypothesis.
When you invest outside tax-sheltered retirement accounts, the profits and distributions on your money are subject to taxation. (Distributions are taxed in the year that they are paid out; appreciation is taxed only when you sell an investment at a profit.) So the non-retirement-account investments that make sense for you depend (at least partly) on your tax situation.
Buying funds directly from fund companies versus buying funds through a discounter’s mutual fund supermarket isn’t inherently better. For the most part, it’s a trade-off that boils down to personal preference and individual circumstances. Why to buy funds direct Many reasons exist to buy funds directly from fund companies.
For prospective real estate investors who feel tenants and building maintenance are ongoing headaches, buying undeveloped land may appear attractive. If you buy land in an area that’s expected to experience expanding demand in the years ahead, you should be able to make a tidy return on your investment. This is called buying in the path of progress, but of course the trick is to buy before everybody realizes that new development is moving in your direction.
It’s important to understand the government’s effect on real estate if you plan on investing. This country offers many examples of the importance of state and local government on prospects for prosperity. The following are key governmental and quasi-governmental factors to consider when researching a prospective community in which to invest: Tax considerations: For decades, California had an unbeatable combination of great weather and job growth that attracted millions from around the world.
For many fundamental analysts, Warren Buffett is the ultimate role model. There’s no denying his success. Shares of Buffett’s Berkshire Hathaway rose from $87,800 a share to $204,624 in the ten years ending November 2014 — an impressive 133 percent gain.That works out to about 8.8 percent a year on average. During that same time period, the Russell 3000 index, which measures the performance of the stock market in general, gained 7.
If you earn employment income (or receive alimony), you have options for investing money in a retirement account that compounds without taxation until you withdraw the money. In most cases, your contributions to these retirement accounts are tax-deductible. Company-based retirement plans Larger for-profit companies generally offer their employees a 401(k) plan, which typically allows saving up to $18,000 per year (for tax year 2017).
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