Expert: Dr. Joseph de Beauchamp - 11/14/2006

Question
hi Dr. Joseph thanks for the information and clarification. Now I am wondering if you would recommend me reading books on mutual funds in order to gain more knowledge about it. If you have any recommendation on the books, I would appreciate it. Thanks for your time.

-------------------------------------------
The text above is a follow-up to ...

-----Question-----
hi Dr. Joseph, I have just graduated with my Bachelor for less than half a year. I have planned to take my MBA in 5 years and  I understand the huge expenses I would have when I take my MBA.
My friends and colleagues have been recommending me to start investing in stocks/funds so that I can save up more money for my education. I am wondering how much does it take to invest ( as in how much in $) to get a decent return? Also, what would you recommend that I should invest in or how to get started as a beginner? Several friends have urged me to go with forex trading, what are your thoughts abt it?
-----Answer-----
You might go to the local library and look over for free the Valueline and Morningstar. This are very good works to study. Morningstar is about 15,000 mutual funds, and this form of investing is best for you. Mutual funds carry lower risk and better returns than most other forms. You can start with many of them for $25.

As far as you friends are concerned, tell them that after 32 years, and as a professor of finance, I have never recommended Forex speculation to anyone, and anytime. I would not even recommend this to Bill Gates. There is no evidence that this speculation works. Ask them for their tax returns to prove up that they made money in this.

Answer
I would send you to the local library and read over the Morningstar book. This will help you understand about the mutual fund sector.

Dr. Joseph de Beauchamp

Here is a list of books and articles below.


Essentials of Investments, Bodie, Kane, and Marcus, 5th ed., 2004, McGraw-Hill. ISBN: 0072510773  --good CFA exam questions in this textbook –under $40 on Amazon.com

The Intelligent Investor: The Definitive Book on Value Investing, Revised Edition, by Benjamin Graham, Jason Zweig; paperback 640 pages, HarperBusiness, July 1. 2003, ISBN: 0060555661  -father of financial analysis and book is under $15 on Amazon.com

·   Anderson, T., 1984, An Introduction to Multivariate Analysis. New York: John Wiley and Sons.
·   Bodie, Z., A. Kane and A. Marcus, 1997, Investments, Fourth Edition. New York: Richard D. Irwin.
·   Cox, J. and M. Rubinstein, 1985, Options Markets. New York: Prentice Hall.
·   Hamilton, J. D., 1994, Time Series Analysis, Princeton University Press.
·   Judge G., W. Griffiths, C. Hill, H. Lutkepohl, T. Lee, 1985, The Theory and Practice of Econometrics, Second Edition. New York: John Wiley and Sons.
·   O’Hara, M., Market Microstructure Theory, 1994, Basil Blackwell, Oxford, UK.
·   Silvey, S. D., 1975, Statistical Inference. New York: Chapman and Hall.
·   Jarrow, R., V. Maksimovic, W. Ziemba, 1995, Finance (Volume 9, Handbooks in Operations Research and Management Science), Elsevier Science, Amsterdam.