If you want to learn how to invest in the stock market, there are really only three ways to do it right: through school, on your own, or with a financial advisor. Each of these options has its merits and downsides, and understanding them will help you make the best decision for your own unique situation. Here’s what each option has to offer and how they stack up against each other.
Many people turn to financial advisors for investment education. After all, these experts have a fiduciary duty that compels them to act in your best interest, right? Unfortunately, there’s no way of ensuring that’s what they’re doing—unless you pay for their services yourself. But even then, it’s possible they could be investing in mutual funds and other products with hidden fees or extra charges.
Personal finance books
I’m sure there are a ton of finance books that can improve your investing skills, but I can’t think of a single one off-hand. If you’re eager to learn more about investing and need some reading material, I recommend checking out these personal finance blogs instead I’ve been meaning to read:
The Intelligent Investor by Benjamin Graham (Amazon) is supposed to be fantastic for beginners and value investors. It was written in 1949, so it’s not exactly new, but it’s also very popular with investors today. Another good book for beginners is A Random Walk Down Wall Street by Burton Malkiel (Amazon). The book explains how index funds outperform actively managed funds over time and why they’re better investments overall.
It also covers topics like diversification and asset allocation strategies, making it a great resource for beginner investors who want to understand how stocks work before they start buying them.
Online courses and communities
There are a lot of gurus in the world of finance, and it can be hard to figure out who has your best interests at heart and who wants you to buy into their latest pitch. If you learn from a respected institution or someone with some experience, however, you might come away with not only knowledge but also credibility in your field. Keep in mind that taking online courses doesn’t replace real-world experience; these classes are meant to supplement what you’re learning elsewhere.