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141 of 151 people found the following review helpful
on October 8, 2012
Format: Paperback
In short, this review explains that this book is very, very basic and limited for anyone who wants a more thorough understanding of how the stock market operates. Anyone seeking more than the most basic of introductions will be disappointed.

All things considered, I think this book is helpful for a select group of people, but you must be someone who falls into that select group to fully appreciate the book. Mr Tyson seems like an all-around good guy who means well and I think genuinely wants to educate the masses about investing and their personal finances. But bear in mind that this book is clearly targeted to the beginner, and is even a bit overly paternalistic at times towards the beginning investor. I'm aware that this is part of the "Dummies" series, but I think Mr Tyson may have perhaps taken that part too literally. Most books in the Dummies series aim for simplified, layman explanations... which is distinguishable from the assumption that the readers are actually dummies or are otherwise incapable of truly learning/mastering the topic they are reading about, in this case.

The biggest pro/praise I have for this book is that Tyson lays out a simple way to approach investing. His method will keep individuals out of trouble and not erode the principal of their investments. He advises against the dangers of being overly unrealistic and the pitfalls associated with trying to get rich quick on the stock market. Further, Tyson discusses stocks, bonds, mutual funds, and the like. You get at least an overall picture of the various instruments available in the investing world. This is a very basic overview, however, as the author does not proceed to discuss concepts such as leverage, options, and futures. But perhaps for a beginner's book, his coverage is appropriate. The topics he does choose to cover will enrich a beginner's conversations and make them seem like they are not ignorant when discussing the stock market. Most importantly, Tyson does not lead the beginner astray. He offers sound advice that is conservative and will help to protect the beginner from high risk.

My con/criticism is that this book is far too basic for those who genuinely want to learn more about investing on their own. Tyson takes on a paternalistic role in his suggestions that most people are incapable of picking their own stocks, and even foolish in trying to do so. This may be the case for many people, but Tyson does not delve into how one should analyze a security by looking at 10-K reports, other SEC filings, management of a company, various financial ratios, the company's position within an industry, and risks that the company is taking. For individuals actually wanting to learn about this, that information should have been present in a book on Investing. (For a starting book that at least has a more thorough review, I'd recommend "The Neatest Little Guide to Stock Market Investing" by Jason Kelly, as that book actually discusses how to do some of the things I have talked about in this paragraph).

I found Tyson's unusual zeal for mutual funds to be excessive. I do think there are benefits to mutual funds for many people, mostly people who don't want to have to manage their own portfolio, or who would simply prefer to let a professional do it for them. And mutual funds can also be a great way to diversify easily, and put your portfolio essentially on auto-pilot. However... there's a substantial downside to mutual funds that Tyson seems to neglect, and my criticism is three-fold.
(1) There is not enough discussion of the fact that mutual funds charge management fees that are often in the 1% to 2% range (meaning that the managed portfolio must make 1% to 2% more just to break even with the market). Mutual funds generally underperform the market, often because of these management fees (roughly 70% of them underperform over a 10-year period).
(2) There is not enough discussion of ETFs (exchange-traded funds), which tend to be less costly than mutual funds. In my mind, these are usually superior choices, so long as you pick ones that are low cost, meaning low management fees. For example, if you are a beginner consider ETFs that follow the small or mid-cap companies (tickers IJR or IJH, respectively). Or even consider an ETF that simply keeps pace with the market (tickers SPY, VOO, or a few others). These have much lower management fees of closer to 0.10%, and in the long run have outperformed the universe of mutual funds by a considerable amount. If a beginner is looking to beat the market, that will likely take either more education/talent/skill, which is not present in this book, a bit of luck, or divine intervention (I'm not ruling out any of these). But a beginner can simply tie the market with an ETF like the ones mentioned.
(3) Tyson appears to part ways with his own advice regarding not picking stocks when he gives advice for how to choose a mutual fund. I hold the view that nearly as much care should be given to choosing a mutual fund as one should put into choosing a stock. Tyson discusses being socially responsible by not choosing mutual funds that invest in vices such as tobacco, gambling, or alcohol products, which you may or may not agree with. He also discusses looking into what types of investments the mutual fund targets. But beyond this, I found his advice to be bare-bones and lacking for the individual who would like to learn more about investing.

Overall, if you are looking to actually educate yourself more thoroughly about investing and are willing to do the sometimes tiring footwork to do so, then you should choose a different book as this one merely scratches the surface. Id' recommend various other titles such as the Kelly book mentioned above, which in my mind provides a very nice introduction to the stock market. Or if you really, really want to learn more about investing, then start reading some of the other classics out there, such as Ben Graham's "Intelligent Investor," Phillip Fisher's "Common Stocks and Uncommon Profits," or even Peter Lynch's "One Up On Wall Street." Further, consider practicing trades risk-free with a paper money account through any broker that has it, as there is not a true substitute for trying your own hand at it.

But if you are a person who does not know the difference between a stock and a bond... if you simply want to learn what the stock market is... and you want a conservative way to safely invest your money, then this book may well be a good introduction. I give it 3 stars because it is a good introduction for those who might want to learn the basics that I have mentioned. But it is EXTREMELY basic; anyone wanting much else will be disappointed.
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48 of 59 people found the following review helpful
on October 4, 2011
Format: PaperbackVerified Purchase
A sensational masterpiece that exceeds expectations. Originally, I thought it was a simple guide to the understanding of investments. After absorbing the information, I quickly realized that my conversations on these topics had improved drastically. Whoever said that investing was strictly for CFO's of major corporations was extremely incorrect in the matter. Eric delivers the message in a dramatic way using a combination of both pictures and words. Now I feel comfortable investing, and earning a living from my investments.
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12 of 13 people found the following review helpful
on April 22, 2012
Format: Paperback
I have bought many of the "For Dummies" books, and this one, like the others is as advertised. It gives any excellent, summary of many of the issues and challenges of the subject. It's written clearly, and anticipates many of the questions I and I assume other people have. The book is very readable and understandable despite the dryness of the topic. It repeatedly makes you ask yourself what you want to invest for (income or retirement) and what your tolerance for risk might be. These are questions that the author wants you to consider. Unlike other "For Dummies" books, while it approaches it's subject with humor, this one has less of the cheeky, almost forced humor found in some of the other books, which you may or may not prefer. Keep in mind that it is for absolute beginners, but these days, all potential investors, new or experienced, need to enter cautiously and with good information.
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14 of 16 people found the following review helpful
on December 17, 2011
Format: PaperbackVerified Purchase
I found this book to be very helpful for the beginner. Easy to understand and covers some great information. I had bought one of the other dummy books and it was very helpful with financial information.
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8 of 9 people found the following review helpful
on January 9, 2013
Format: PaperbackVerified Purchase
I'm not a novice but still wanted to read this to see what a professional views as important to include in a book that provides an introduction to investing. Although many people might not consider themselves beginners, I would still recommend they read this book. There are many basic investing principles that we forget in our hectic and busy lives. It helps to read books like these so we remain in the correct mindset and are on the right path. There is a lot of information and principles to absorb for a novice. If you forget some things or don't remember a lot after reading it, this book is the perfect candidate to be read twice or even three times to have that foundational knowledge and wisdom engrained in you.

The material in chapters 10-15 (real estate/small business) does not apply to me so I skipped it. Since I already own my home with the mortgage paid I don't have any interest in purchasing additional property or investing in real estate. I also don't have an interest at this time in starting a business or investing in an existing business. Its not to say I won't be open to these options in the future its just that I don't think they have to be an essential part to everyone's investing plan as the author asserts. Everyone's situation is different.

I disagree with Fidelity not being mentioned as one of the better brokers due to the author not believing "their fees are justified unless you want to do business with a broker that maintains a branch office". Except for the high $75 fee for trading non-Fidelity mutual funds, I'm not sure what he is referring to with regard to high transaction fees. Trades of ETFs and stocks are $7.95, Fidelity mutual funds have no trading fee, 30 of BlackRock's iShares ETFs trade free and the cash management account has no fees whatsoever. Once your non-retirement balance reaches $300,000 you are given preferentional service in Fidelity Premium Services in addition to the vast research sources you already get. There is no perfect discount broker but all in all I believe Fidelity should be on anyone's short list. I have been with them for three months and am very satisfied.

I love all of the informational resources that the author provides. The Value Line Investment Survey in chapter 6 includes a boatload of helpful information on individual stocks, but the annual subscription fee is a little steep for those who are not individual stock investors. I also like how there is emphasis placed on fact checking as well as being aware of agendas and the corruption of advertising in periodicals, radio and tv.

After reading this book, I would recommend going on to Mutual Funds for Dummies and Exchange Traded Funds for Dummies. Heck the more information you can learn, the better understanding you will have for optimal decision making.
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6 of 6 people found the following review helpful
on May 9, 2012
Format: Paperback
Can never have too many books for anything, if you take away one idea should get your money back over and over again, nice reference book to have and easy to understand.
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13 of 16 people found the following review helpful
on April 12, 2012
Format: Kindle Edition
I know absolutely nothing about investing. This being said this book started off very simply. It was actually a little slow at the beginning for my taste but this can be expected from a dummies book. It gave a lot of basic information before getting more detailed. The book flowed very nicely. If you want to get into investing I would start by reading this book. I would also advise talking to a professional after reading this book. That way you can keep up with any advice they have for you. This book is a good first step into investing.
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6 of 7 people found the following review helpful
Format: Paperback
This is a great book for the beginning investor. It teaches you how to take the emotion out of investing (which is what always creates chaos) and to follow logical rules for success. Highly recommended!
- Aimee Elizabeth, Author of Poverty Sucks! How to Become a Self-Made Millionaire.
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2 of 2 people found the following review helpful
on May 29, 2014
Format: Kindle EditionVerified Purchase
...which attracted me to this book. So far, I've felt my investing IQ raise by at least 10 points. I was truly a novice when I picked up this book, and I am preparing myself to meet with a financial advisor. I want to have some clue when I walk in the door what he's talking about, and more importantly what I want to accomplish in that meeting. I think this will help me express my goals without sounding like a complete idio...I mean dummy.
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10 of 14 people found the following review helpful
on November 12, 2011
Format: Paperback
Investing for Dummies, as all novice guides produced by this company was really helpful. It's certainly no substitute for years of experience, but it's definitely helpful if you need to learn the basics. It dispels a lot of common misconceptions commonly made by first time investors. Definitely worth the read and money for aspiring investors, particularly for real estate investment, though their book on real estate speculation is worthy there as well.
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