| Short advice: get a low-cost physically-replicating ETF covering a large part of the market (e.g. Vanguard) and dollar-cost average. This is the ultra-low-effort average returns approach. Stock picking advice and understanding the economy: I really recommend reading all of Warren Buffett's letters to shareholders which can be found on the Berkshire Hathaway website. They are written in a down-to-earth style and offer a panoramic view of investing, from accounting issues to competitive advantages to macroeconomics. You can also see Warren's investing style evolve and him deal with various issues throughout history, from high inflation to the dot-com boom. Warren boils down many issues into easily remembered sayings ("Be greedy when others are fearful and fearful when others are greedy", though the sayings themselves are probably as old as the stock market itself). Find investments that have moats is one of Warren's guiding rules, i.e. business advantages that are hard to replicate. Learn about accounting. You don't have to learn everything, but you should know about the things that will affect your valuation of an investment. Pension contributions, stock-option accounting, etc. Come up with your own metrics to compare companies in a sector to find out who is the most efficient etc. You will have to find an edge, something that most other people don't know, otherwise you'll just follow the crowd. Things that aren't in fashion are great places to find bargains. Understand how a discounted cash flow (DCF) calculation works. The important part in a DCF from the point of an investor is to look at how sensitive the results are with regard to changes in the input variables (because the risk-free interest rate and size/timing of future cash flows isn't known in advance). Understand the effect of interest rates on asset prices (see DCF calculation). Understand the debt cycle. We are at an interesting point in time, coming ever closer to our debt-carrying capacity. Here is a nice video by Ray Dalio on this topic: https://www.youtube.com/watch?v=PHe0bXAIuk0 Some economists probably disagree with some things said there, but i think the gist of it is spot on. |