# I am trying to understand how investing works. **URL:** \ **Category:** Factual Questions\ **Created:** [May 14, 2009, 2:10am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375 "2009-05-14T02:10:04Z")\ **Posts on this page:** 7\ **Page:** 2
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [May 15, 2009, 1:47am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/21 "2009-05-15T01:47:10Z")
[bogleheads.org](http://bogleheads.org) It’s the only investment site I would recommend. Anything else, and you’re getting sold on something you don’t need. Read the stickies, read the posts. But most imporantly, don’t invest until you have plan that makes sense to you. And in all seriousness, stay away from individual stocks. If you simply cannot help yourself, no more than 5% of your portfolio should to go to individual stocks. Figure out which stock/bond allocation you’re comfortable with. There are ways to figure that out from the Boglehead site, then, stick with it. And stick with low-cost, NO-load index funds too. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [May 15, 2009, 1:49am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/22 "2009-05-15T01:49:09Z")
> [@thomasadair\_hotmail.com](#): > > Risk-Free Investing is not only possible, but in abundance. Just that people are told and taught that it is impossible. No risk has been in front of all, but not seen. Nobody said it was impossible. But it is mostly impossible to do it consistently. ---
**Author:** ![Arjuna34](https://avatars.discourse-cdn.com/v4/letter/a/eb8c5e/32.png) [@Arjuna34](https://boards.straightdope.com/u/Arjuna34)\ **Post date:** [May 15, 2009, 2:14am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/23 "2009-05-15T02:14:54Z")
> [@CC](#): > > That said, I’d recommend a book that starts at the beginning, called _The Truth About Money_, by Ric Edelman. He explains things that you think that at your age you should understand, because everyone else seems to. It’s very good and should help you to understand the real basics. I second this recommendation, with the caveat that he’s biased against index mutual funds. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [May 15, 2009, 2:38am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/24 "2009-05-15T02:38:19Z")
> [@Arjuna34](#): > > I second this recommendation, with the caveat that he’s biased against index mutual funds. If you second it, I’ll denounce twice then. I only want to denounce it as a serious investing book though. From what I can gather from some descriptions on Amazon, is that it is a good book to help you understand money, but I would not recommend it for advice on investing. Not that I’m holy than thou, just that any financial pundit, author, whatever… who is not for index funds, is not to be trusted IMO. Most people, if the’re going to invest, should go with index funds. Even the super rich should be in index funds, but they tend to be too short sighted and look to prestige to invest their money, and go for the quick fix (ie. hedge funds). ---
**Author:** ![Happy\_Poster](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@Happy\_Poster](https://boards.straightdope.com/u/Happy_Poster)\ **Post date:** [May 15, 2009, 8:31am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/25 "2009-05-15T08:31:51Z")
It is simply incorrect to argue that the super rich should only be in index funds. Index funds only work _best_ in a market where the inefficiencies are inexploitable Incidentally that doesn’t apply even to the US stockmarket; however the key issue is that it is impossible for the layman to determine who is able to exploit them, track record etc having very little predictive value and financial advisors who may be expected to do this job (haha, good luck!) being practically impossible to evaluate for the same reason. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [May 15, 2009, 6:18pm UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/26 "2009-05-15T18:18:51Z")
I guess there’s that reason. But it’s the fees hedge funds charge to their investors. If hedge fund investors had any common sense, they would run. But since it’s prestigious to invest in them, that goes unchecked, or is willfully ignored for performance chasing. ---
**Author:** ![With\_Rye](https://avatars.discourse-cdn.com/v4/letter/w/838e76/32.png) [@With\_Rye](https://boards.straightdope.com/u/With_Rye)\ **Post date:** [May 17, 2009, 6:23am UTC](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375/27 "2009-05-17T06:23:13Z")
I’m starting to look into investing myself. I like [fool.com](http://fool.com) a lot. [Previous page](https://boards.straightdope.com/t/i-am-trying-to-understand-how-investing-works/496375.md?page=1)