Top 5 Resources To Become A Better Investor

Morningstar Learning Center

For beginners, the best way to become a better investor is to learn the basics of investing. Morningstar, a popular mutual fund and stock resource company, offers a variety of short courses in their learning center on everything from stocks, mutual funds, bonds, and portfolio construction. Investors could do worse than complete a few of these.

Read The Investment Classics

Many successful individual investors start by reading the so-called investment classics. These are books written by some of the professions wealthiest and most successful investors. A few I recommend are Common Sense on Mutual Funds by John Bogle, The Intelligent Investor by Benjamin Graham, Common Stocks And Uncommon Profits by Phil Fisher, Unconventional Success by David F. Swenson, and The Intelligent Asset Allocator by William Bernstein. Reading these five books will make you more knowledgeable than many professional financial advisors and will certainly make you a better investor.

Educate Yourself About Various Asset Classes

Successful investors need to know the risk/return characteristics of several different asset classes, not just stocks and bonds. Other important asset classes include real estate, commodities and cash, all of which may have a place in your portfolio. You should have a pretty good idea of how these asset classes fit into your portfolio after reading the investment classics above; Unconventional Success has a particularly good treatment of the major asset classes. You might also want to check out my articles on various asset classes and asset allocation.

Determine Your Risk Tolerance

Knowing how much risk you can handle is essential to being successful as an investor. You are likely to panic and abandon your investment plan at the worst possible moment if you unwittingly take too much risk. Know thyself.

Be Inquisitive

By now, you should be more or less comfortable with managing your own investments, but there’s a seemingly infinite amount of information out there. Intelligent students never stop learning. Interested the mathematics of modern portfolio theory? Google it and learn. The world is your oyster.