In my post yesterday about resources I meant to suggest some books.
I recently read A Random Walk Down Wall Street and am currently reading One Up on Wall Street. I've also got IBD's Guide to the Markets -- I got it a long time ago but it's probably a good time to re-read it. I will probably be reading The Intelligent Asset Allocator in the near future.
After reading Random Walk I wanted to sell all my stocks and put it all my money into a Wilshire 5000 index fund. If you don't want to read it, here's a summary: The stock market is mostly random. Diversification is good. Stock picking is really hard. Fees will kill you. Due to these factors, individual investors probably can't consistently beat a broad no-load index fund by trying to pick their own stocks. However, if you want to try, the author gives you some suggestions.
One Up on Wall Street is much more optimistic and better matches what I want to do with my IRA: find inefficiencies in the market (i.e. undervalued stocks) and exploit them. It's also quite well written -- I mean, it has a real, enjoyable human voice.
Another one I want to read, but which I'll probably get at the library, is How to Make Money in Stocks. The book's certerpiece is CAN SLIM, which looks like a rather complicated momentum technique involving technical analysis. Probably worth a look but it doesn't seem like my style.
Posted by kindall at June 30, 2005 03:19 PM