Details

<p><b>Introduction</b><b> 1</b></p> <p>About this Book 1</p> <p>Foolish Assumptions 2</p> <p>Icons Used in This Book 2</p> <p>Beyond the Book 3</p> <p>Where to Go from Here 3</p> <p><b>Part 1: Getting Started Investing Online </b><b>5</b></p> <p><b>Chapter 1: Getting Yourself Ready for Online Investing </b><b>7</b></p> <p>Why Investing Online is Worth Your While 8 Getting Started 9</p> <p>Measuring How Much You Can Afford to Invest 12</p> <p>Turning yourself into a big saver 12</p> <p>Using desktop personal finance software 13</p> <p>Perusing personal finance websites 15</p> <p>Capitalizing from personal finance apps 17</p> <p>Saving with web-based savings calculators 18</p> <p>Relying on the residual method 19</p> <p>Using web-based goal-savings calculators 19</p> <p>Deciding How You Plan to Save 21</p> <p>To Be a Successful Investor, Start Now! 21</p> <p>Learning the Lingo 22</p> <p>Setting Your Expectations 23</p> <p>Keeping up with the rate of return 23</p> <p>The power of compounding 24</p> <p>Determining How Much You Can Expect to Profit 24</p> <p>Studying the past 25</p> <p>What the past tells you about the future 28</p> <p>Gut-Check Time: How Much Risk Can You Take? 30</p> <p>Passive or Active? Deciding What Kind of Investor You Plan to Be 31</p> <p>How to know if you’re a passive investor 31</p> <p>Sites for passive investors to start with 32</p> <p>How to know whether you’re an active investor 33</p> <p>Sites for the active investor to start with 34</p> <p><b>Chapter 2: Getting Your Device Ready for Online Investing</b><b> 35</b></p> <p>Turning Your Device into a Trading Station 36</p> <p>Using favorites to put data at your fingertips 37</p> <p>Putting key mobile apps a touch away 38</p> <p>Compiling a list of must watch sites 39</p> <p>Tracking the Market’s Every Move 39</p> <p>Getting price quotes on markets and stocks 40</p> <p>Slicing and dicing the markets 41</p> <p>Your crystal ball: Predicting how the day will begin 43</p> <p>Getting company descriptions 44</p> <p>Keeping tabs on commodities 44</p> <p>Tracking bonds and U.S Treasurys 45</p> <p>Monitoring Market-Moving News 46</p> <p>Financial websites 46</p> <p>Traditional financial news sites 48</p> <p>Checking In on Wall Street Chatter 50</p> <p>Everyone is an expert: Checking in with blogs 51</p> <p>Finding blogs 52</p> <p>Getting in tune with podcasts 52</p> <p>Taming Twitter 53</p> <p>Keeping Tabs on the Regulators 54</p> <p>Executing Trades 56</p> <p>Searching the Internet High and Low 56</p> <p>Keeping the Bad Guys Out: Securing Your PC 57</p> <p>Mastering the Basics with Online Tutorials and Simulations 58</p> <p>Online tutorials 59</p> <p>Simulations 60</p> <p><b>Chapter 3: Choosing the Best Account Type for You</b><b> 63</b></p> <p>Knowing How Different Accounts Are Taxed 64</p> <p>Taxable accounts 64</p> <p>Retirement accounts 64</p> <p>Education savings accounts 65</p> <p>Plain Vanilla: The Taxable Brokerage Account 66</p> <p>The importance of dividends 67</p> <p>How capital gains are taxed 69</p> <p>The high tax price of being short-term 70</p> <p>How long-term capital gains are taxed 71</p> <p>When you can win from your losses 71</p> <p>What to do with your worthless stock 73</p> <p>Using technology to measure your capital gain 74</p> <p>Measuring your capital gains if you’ve lost your records 77</p> <p>How dividends are taxed 79</p> <p>Retirement Accounts: Knowing Your 401(k)s from Your IRAs 80</p> <p>401(k)s: A great place to get started 82</p> <p>Managing your 401(k) plan online 83</p> <p>Getting in tune with IRAs 84</p> <p>Setting up an IRA 85</p> <p>Going Back to School with Education Savings Accounts 86</p> <p>Three numbers you need to know: 529 87</p> <p>Getting up to speed on 529 plans online 88</p> <p>Understanding 529 fees 89</p> <p>Living in the 529’s shadow: The Coverdell 90</p> <p><b>Chapter 4: Connecting with an Online Broker</b><b> 91</b></p> <p>Finding the Best Broker for You 92</p> <p>The nine main factors to consider 92</p> <p>Gotchas to watch out for 94</p> <p>Separating the Types of Brokerages 94</p> <p>Paying the minimum with a deep discounter 95</p> <p>Get more with a discounter 97</p> <p>Full-service traditional 104</p> <p>Avoiding Hidden Fees 106</p> <p>Finding Out What Reviewers Think 108</p> <p>Is Your Money Safe? Checking Out Your Broker 110</p> <p>Cutting the Cord: Mobile Trading 111</p> <p>Pay Attention to Where Your Cash is Parked: Money Market Funds 113</p> <p>Buying Stocks and Mutual Funds without a Broker 114</p> <p>Stocks: Direct investments 114</p> <p>Mutual funds: Straight from the mutual fund company 116</p> <p>Opening and Setting Up Your Account 116</p> <p>The checklist of what you need to know 117</p> <p>The checklist of what you need to have 117</p> <p><b>Chapter 5: Getting It Done: How to Enter and Execute Trades </b><b>119</b></p> <p>Understanding How Stock Trades and Shares Are Handled 120</p> <p>Ways you can hold your investments 120</p> <p>A second in the life of a trade 126</p> <p>Getting It Done: Executing Your Trades 127</p> <p>Types of orders 127</p> <p>Costs of different orders 129</p> <p>Tailoring your trades even more 129</p> <p>Going off the Beaten Path with Different Trading Techniques 130</p> <p>Cashing in when stocks fall: Selling stock short 130</p> <p>Tracking the short sellers 131</p> <p>Living on borrowed time: Buying stock on margin 132</p> <p>The call you don’t want to get: The margin call 135</p> <p>The nightshift: Trading in the extended hours 135</p> <p>Knowing Your Options: Basic Ways to Best Use Options 136</p> <p>The different types of options 137</p> <p>Basic options strategies 137</p> <p>How to get option prices online 140</p> <p>How to buy options online 141</p> <p>Discovering more about options online 142</p> <p>Stepping Through Placing a Trade 143</p> <p>Using the brokerage’s website 143</p> <p>Using the brokerage’s mobile app 145</p> <p>Using the brokerage’s PC software 146</p> <p><b>Part 2: Using Online Investment Resources</b><b> 149</b></p> <p><b>Chapter 6: Why Stock Prices Rise and Fall</b><b> 151</b></p> <p>How Stocks Get into the Public’s Hands 152</p> <p>Step 1: An idea becomes a company 152</p> <p>Step 2: The company expands and grows 152</p> <p>Step 3: The company goes public 154</p> <p>Step 4: The new shares trade 155</p> <p>Why Stocks Move Up and Down in the Short Term 155</p> <p>Tracking the market’s every move 156</p> <p>Getting in tune with earnings reports 157</p> <p>Companies and the company they keep in their industries 162</p> <p>Monitoring the big cheese 165</p> <p>Where it all begins: Tracking prices of raw materials 165</p> <p>Getting with the mo’ 166</p> <p>Mania over merger chatter 167</p> <p>Why bond yields aren’t boring 168</p> <p>The heartbeat of the economy: Economic reports 168</p> <p>What they know that you don’t — Insider buying and selling 170</p> <p>Knowing how investors are feeling: Tracking market sentiment 172</p> <p>What Moves Stocks in the Long Term? 175</p> <p>Going back to school with academic research 175</p> <p>Learning from the wise men 176</p> <p><b>Chapter 7: Connecting with Other Investors Online</b><b> 179</b></p> <p>Finding Kindred Investment Spirits Online 180</p> <p>Getting the Message with Stock Message Boards 180</p> <p>Stock message boards aren’t for everyone 181</p> <p>Understanding the types of stock message boards 181</p> <p>Knowing the ulterior motives of some online stock message board members 182</p> <p>Determining what exchange or market a stock trades on 184</p> <p>A penny saved: Beware of penny stocks 185</p> <p>Connecting with an Investment Club 187</p> <p>How to find an investment club that suits you 188</p> <p>Understanding the drawbacks of investment clubs 188</p> <p>Social Networking Comes of Age 189</p> <p>What’s the fuss about Twitter? 190</p> <p>Getting a read on the market with Twitter 193</p> <p>Giving Facebook some face time 194</p> <p>The Brave New World: Social Networking Meets Online Investing 196</p> <p>Social investing sites as a higher form of stock message boards? 196</p> <p>Plugging into social investing sites 197</p> <p>Starting to get social: Trying social investing sites 198</p> <p><b>Chapter 8: Measuring Your Performance</b><b> 199</b></p> <p>The Importance of Tracking Your Performance 200</p> <p>Why it’s worth the trouble to measure your returns 200</p> <p>Why you want to measure your risk, too 201</p> <p>Calculating Your Performance Yourself 202</p> <p>The easiest way to calculate returns 203</p> <p>An easy way to calculate returns if you’ve deposited or taken out money 203</p> <p>The hardest way to calculate returns 205</p> <p>Calculating How Risky Your Portfolio is 206</p> <p>A simple way of calculating your average return 207</p> <p>Calculating your risk 209</p> <p>What does it all mean? Sizing up your portfolio 210</p> <p>Finding other things to compare your returns to 211</p> <p>Using Online Tools to Calculate Your Performance 212</p> <p>Looking at online performance-measurement tools 213</p> <p>Using personal finance and performance-tracking software 213</p> <p>Using stock simulation and social investing sites 214</p> <p>Using portfolio-tracking websites 215</p> <p>Using performance-analytics websites 216</p> <p><b>Chapter 9: Choosing an Asset Allocation</b><b> 219</b></p> <p>The Recipe for Your Online Investing: Asset Allocation 220</p> <p>What’s so great about diversification? 221</p> <p>Zig-zag: The second element of diversification 221</p> <p>Bigger isn’t always better: Understanding size 223</p> <p>Picking investments with the right styles 224</p> <p>How rebalancing steadies your portfolio 226</p> <p>How discipline can save your portfolio from getting punished 227</p> <p>Using and Finding Your Perfect Asset Allocation 227</p> <p>Determining your current asset allocation 228</p> <p>Using guidelines 230</p> <p>Picking an asset allocation based on your risk tolerance 232</p> <p>Picking an asset allocation based on your goals 234</p> <p><b>Chapter 10: Finding and Buying Mutual Funds</b><b> 237</b></p> <p>The Feeling is Mutual: Understanding Mutual Funds 238</p> <p>Considering the pros of mutual funds 238</p> <p>Drawbacks of mutual funds worth considering 239</p> <p>Types of Investment Companies 240</p> <p>Categorizing Mutual Funds 242</p> <p>Stock funds 242</p> <p>Bond funds 243</p> <p>Money market funds 243</p> <p>Hybrid funds 244</p> <p>What to Look for in a Mutual Fund 245</p> <p>Deciphering the morass of mutual fund fees 247</p> <p>Finding mutual funds that work for you 249</p> <p>Buying mutual funds with an online broker 250</p> <p>How to buy mutual funds without a broker 251</p> <p>Comparing Mutual Funds 252</p> <p>Putting funds’ characteristics side by side 252</p> <p>Analyzing a mutual fund’s risk 253</p> <p>Getting the Full Story: Reading a Mutual Fund’s Prospectus 254</p> <p>Getting More Information about Funds 255</p> <p><b>Chapter 11: Finding and Buying Exchange-Traded Funds</b><b> 257</b></p> <p>Getting to Know ETFs 258</p> <p>Invest in Popular Indexes with ETFs 260</p> <p>How to Find the Right ETF for the Job 260</p> <p>Tracking ETFs’ every move 262</p> <p>ETF fees can vary 262</p> <p>Finding out how pricey an ETF is 264</p> <p>Using ETF-Recommending Robo-Advisors 265</p> <p>What the heck is a robo-advisor? 265</p> <p>Robo-advisors that hold your hand 266</p> <p>Robo-advisors that are completely automated 267</p> <p>ETFs That Go off the Beaten Path 269</p> <p>ETFs Have Issues, Too 270</p> <p>A Few Final Things to Consider about ETFs 271</p> <p>Using ETFs as a way to invest in themes 272</p> <p>Betting on commodities and currencies with ETFs 272</p> <p>Reading the fine print: The prospectus 273</p> <p><b>Part 3: Maximizing Investment Knowledge</b><b> 275</b></p> <p><b>Chapter 12: Putting Companies Under the Microscope </b><b>277</b></p> <p>Understanding Financial Statements 278</p> <p>Downloading financial statements 279</p> <p>Reading the income statement 281</p> <p>Basics about the balance sheet 282</p> <p>Understanding the cash flow statement 284</p> <p>Putting it all together 284</p> <p>Spotting trends in financial statements 286</p> <p>Using financial statements to understand the company 288</p> <p>Unearthing Details about the Company from Regulatory Filings 289</p> <p>Finding the nitty-gritty description of the company 290</p> <p>Getting the details on company announcements 290</p> <p>Finding out whether the company is being sued 290</p> <p>Getting the truth from management 291</p> <p>Seeing whether the company got into a tiff with its auditors 292</p> <p>Weighing the risk of failure 293</p> <p>Seeing what the company is worried about 293</p> <p>Assessing how much the company’s management is getting paid 293</p> <p>Determining the independence of the company’s leadership 294</p> <p><b>Chapter 13: Evaluating Stocks’ Prospects</b><b> 295</b></p> <p>Finding Out How to Not Overpay for Stocks 296</p> <p>Quick ways to determine how pricey a stock is 298</p> <p>Ways to interpret valuations 300</p> <p>Studying stocks using automated tools 303</p> <p>Shortcomings of studying stocks’ valuation ratios 303</p> <p>The armchair investor’s way to not overpay 305</p> <p>Evaluating Stocks’ Potential Return and Risk 305</p> <p>Measuring a stock’s total return 306</p> <p>Finding out more about risk and return online 307</p> <p>Digging Even Deeper: Advanced Valuation Techniques 308</p> <p>Using the dividend discount model to see whether a stock is on sale 308</p> <p>The value hunter’s favorite weapon: The discounted cash flow analysis 309</p> <p><b>Chapter 14: Finding Investment Ideas with Online Stock Screens</b><b> 313</b></p> <p>Getting Familiar with Stock Screens 314</p> <p>Creating an online screen 315</p> <p>General characteristics you can use to screen stocks 316</p> <p>Choosing an online screening site 317</p> <p>Knowing What You’re Looking For: Popular Screening Variables 319</p> <p>The basics: Because you have to start somewhere 319</p> <p>Getting more particular: More advanced variables to screen for 321</p> <p>Finding stocks using trading-pattern variables 322</p> <p>Getting Started with Premade Screens 323</p> <p>Designing a Custom Screen 325</p> <p>Finding different industries’ best companies by using Yahoo! Finance 326</p> <p>Finding value or growth companies by using Morningstar’s Stock Screener 327</p> <p><b>Chapter 15: Analyzing the Analysts and Stock Pickers</b><b> 329</b></p> <p>Picking Apart Professional Analyst Reports 330</p> <p>Accessing analyst reports online 330</p> <p>Determining which Wall Street analysts are worth listening to 332</p> <p>What to look for in an analyst report 334</p> <p>Pssst understanding the whisper number 335</p> <p>Accessing and understanding credit ratings 335</p> <p>Connecting with Online Stock Ratings 338</p> <p>Putting quant stock models to work for you 338</p> <p>Sharing stock ratings with other investors online 339</p> <p>Evaluating Stock- and Mutual Fund–Picking Newsletters and Websites 341</p> <p>Before you sign up for a stock-picking service 341</p> <p>Using newsletters to your advantage 342</p> <p><b>Chapter 16: Researching and Buying Bonds Online</b><b> 345</b></p> <p>Getting Acquainted with Bonds 346</p> <p>Knowing who issues debt 347</p> <p>Online resources to find out more about bonds 350</p> <p>Common traits of bonds 350</p> <p>Finding and Buying Bonds Online 355</p> <p>Finding individual bonds online 355</p> <p>Sealing the deal: Buying individual bonds online 357</p> <p>Considering Bond Alternatives 359</p> <p>Money market funds and certificates of deposit 360</p> <p>Wall Street’s lost child: Preferred stock 361</p> <p><b>Part 4: The Part of Tens</b><b> 363</b></p> <p><b>Chapter 17: Ten Top Mistakes Made by Online Investors</b><b> 365</b></p> <p>Buying and Selling Too Frequently 366</p> <p>Letting Losers Run and Cutting Winners Short 367</p> <p>Focusing on the Per-Share Price of the Stock 367</p> <p>Failing to Track Risk and Return 368</p> <p>Taking Advice from the Wrong People 368</p> <p>Trying to Make Too Much Money Too Quickly 369</p> <p>Letting Emotions Take Over 370</p> <p>Looking to Blame Someone Else for Your Losses 371</p> <p>Ignoring Tax Considerations 372</p> <p>Dwelling on Mistakes Too Long 372</p> <p><b>Chapter 18: Ten Ways to Protect Your Investments and Identity Online</b><b> 373</b></p> <p>Beware of Pyramid Schemes 374</p> <p>Steer Clear of Ponzi Schemes 375</p> <p>Avoid Tout Sheets and Know Whom You’re Taking Advice From 376</p> <p>Don’t Fall for Investment Spam Emails 377</p> <p>Understand Loopholes Scammers Can Use 378</p> <p>Familiarize Yourself with the Fingerprints of a Scam 379</p> <p>Learn to Be an Online Sleuth 380</p> <p>Know How to Complain If You Suspect a Fraud 380</p> <p>Make Sure That Your Computer is Locked Down 381</p> <p>Be Aware of Online Sources for More Information 382</p> <p><b>Chapter 19: Online Investors’ Ten Most Common Questions</b><b> 383</b></p> <p>How Do I Find Out Which Companies Are Going to Split Their Stock? 384</p> <p>Can I Use Options to Boost My Returns? 384</p> <p>Can I Still Lose Money If I Invest in Bonds? 385</p> <p>What’s the Easiest Way to Invest in Commodities? 386</p> <p>How Long Will it Take for Me to Double My Money? 386</p> <p>Do I Have a Say in How a Company I’m Invested in Operates? 387</p> <p>How Can Deep-Discount Online Brokers Make Money Charging $5 or Less for Trades? 388</p> <p>How Are Hedge Funds, Private-Equity Funds, and Venture Capital Funds Different? 388</p> <p>If a Company is Buying Back Its Stock, Does That Mean the Stock is Cheap? 389</p> <p>If I Own a House, Do I Need to Hold Real-Estate Investment Trusts in My Stock Portfolio, Too? 390</p> <p>Index 391</p>

<p><b>Matt Krantz</b> is a nationally known financial journalist who specializes in investing topics. He's personal finance and management editor at <i>Investor's Business Daily.</i> He's also worked in the financial industry and covered markets and investing for <i>USA TODAY.</i> His writing on financial topics has also appeared in <i>Money</i> magazine, <i> Kiplinger's</i>, and <i>Men's Health</i>. Krantz is the author of <i>Fundamental Analysis For Dummies</i> and co-author of <i>Investment Banking For Dummies.</i>

<ul> <li>Set expectations and assess risk</li> <li>Choose an online broker and weigh your options</li> <li>Use the latest tools, data, and resources</li> </ul> <p><b>Build a winning portfolio</b> <p>Online investing has never been easier—or more potentially confusing. Now that every broker and finance site has its own app, data, or approach, you can easily be misled and could potentially make a bad decision. This book helps you reduce risk and separate the gimmicks from the gold. It points investors of all experience levels to the pro tips, calculators, databases, useful sites, and peer communities that will help lead to success. <p><b>Inside...</b> <ul> <li>Set your goals and expectations</li> <li>Assess any possible risk</li> <li>Analyze stocks and financial statements</li> <li>Assemble a suite of tools to calculate your performance</li> <li>Choose the right online broker and protect your information</li> </ul>

US