Solving Investment Problem #3: I don’t know the language.

Bringing a beginning investor up to speed with the investing vocabulary is not an easy task.  This problem does not have a quick solution.  However, it is made much easier if one takes the path of passive investing vs. active investing.  There is much less to learn and the fundamentals are quite basic.  Here at ITA Wealth Management, our preference is passive investing through the use of index ETFs.  ETF stands for Exchange Traded Funds and it is nothing more than a basket of stocks that one can buy and sell through a broker such as TDAmeritrade.

How does one learn the vocabulary to the point where one can ask intelligent questions.  1) Read the two elementary volumes I mentioned earlier.  2) For a little variety, when you check in on this blog, scroll down the page and off to the right you will find something called Random Entries.  Select one or two of those random posts to read each visit.  It will not be long before the lingo begins to catch hold and become second nature.

Solving Investment Problem #2: I don’t know where to begin.

For readers or prospective investors who don't know where to begin, one place to start is to click on the Category to the right titled, Beginning Investors.  My second recommendation is to read two short books.  The two easiest investment books that will put you on the right path are: "The Investment Answer" by Daniel Goldie and Gordan Murray and "The Elements of Investing" by Burton Malkiel and Charles Ellis.  The first book is about 80 pages and the second is approximately 135 pages. Both are useful reads for the beginning investor.

If you feel you need an advisor to manage your money, look for someone who will put you in DFA index funds.  One such advisor is Mark Hebner and you will find his web site one of the very best on the Internet.  I have no financial connections with Mark Hebner.

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