Good Books For Fund Investors

by Alan Lavine and Gail Liberman

It’s best to do some homework before you invest. Educating yourself pays off in the long run. The reason:

You understand how the financial markets work. Then you be a do-it-yourself investor or hire a good pro.

There are several good mutual fund books on the market today. “Mutual Funds For Dummies,” IDG Books, and “The Complete Idiot’s Guide To Making Money With Mutual Funds, Alpha Books, are popular. These books show you the ins and out of mutual fund investing. They are easy to read.

Understand Wall Street, Liberty Publishing Company, is a great book about stocks and bonds. The book explains who Wall Street works. You lean how to read financial statements and evaluate companies.

Morningstar, a Chicago-based research company, published an excellent “Fearless Investing Series.” The Series include three work books with the following titles: “Fund the Right Mutual Funds,” Diversify Your Portfolio,” and, Maximizing Your Fund Returns.” The series is published by Wiley, NY.

Go through all three workbooks and you will be an expert on mutual fund investing.

Here are some tips from the books:

• You don’t need a lot of mutual funds to get diversification. When you diversify your investments, you own different types of assets. So if one asset does poorly, other assets may do well. Morningstar says you can keep it simple and invest in the Vanguard Total Stock Market Index Fund. This fund owns large, medium size and small company stocks.

• You should also invest in precious metals, real estate and bond mutual funds in addition to stock funds. You get an extra layer of protection. If stocks perform poorly, these other investments may shine.

• Before you buy and mutual fund look at the following: Fund performance each year in addition to annual average returns over several years; Fund risk, which is how it does in up and down markets; the fund’s holding; and, the fund’s cost, which my include commissions and ongoing fees.

Alan Lavine and Gail Liberman are husband-wife personal finance columnists, journalists and authors. They are the authors of "Rags To Retirement," published by Alpha Books. Their columns appear in newspapers throughout New England and the Southeast, as well as online. Their commentary on mutual funds and personal finance is carried by 200 radio stations nationwide every Sunday over Business News Network's Charles DeRose Financial Advisor Show. Al and Gail’s new book is "Rags To Retirement:  Stories from people who retired well on much less than you think," published by Alpha Books.

More articles by Al and Gail can be found here.