Expert: Dr. Joseph de Beauchamp - 10/16/2006

Question

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Followup To

Question -
Me and my boyfriend are looking to start investing but we're so new to this we don't even understand the difference between a stock and a mutual fund. The ony thing I really know is when I was working for a corporation we we're given stock grants and I really liked having that to fall back on in emergencies. I'm no longer at the corporation, as Im now a homemaker, but we want to continue investing, but we dont have alot of money to start with, maybe 100$-200$ US. What is some good literature that you could recommend to "babies" in investments?

Answer -
Go to the local library. Find the book on mutual funds called Morningstar. It is well over 1000 pages of reviews of mutual funds. You can also look over the Valueline investment guide for stocks. Both books are free to read and without cost. You can also look over the Standard and Poors guides.

You might want to read over the 10-k for Bershire Hathway stock by going to http://www.hoovers.com and look under the SEC filing section for the 10-k. Warren Buffett is the most successful investor of all times, and this is his company. This is all free information and without cost. When you complete this, email me again how this helped you.

Dr. Joseph deBeauchamp

found the link and picked up a little bit of understanding. but one question, when you're viewing the 10k should you look for a steady increase in net gain? or fi they have a plateau is that acceptable. also, what would be the most important parts to look at on the 10k?  

Answer
In this particular 10-k and annual report: Warren only missed beating the market 10 times since 1952. This is the best record on the street. He has accomplished much and would be a worthy investment, long term. He shows this comparison in the front part of the annual report.

Look at the other sources also. Investing is hard work, and you should do the research. You should take an active role in your money, and keeping exploring. Look over that Morningstar book. Valueline will describe the Bershire stock on objective basis, and you will see a great deal on how they look at things. I look more at the equity to total debt as it relates to the sales to total assets area, but this is beyond the scope of what most people are interested in learning.

Dr. Joseph de Beauchamp