The Neatest Little Guide To Stock Market Investing
The Neatest Little Guide to Stock Market Investing2013 Edition
The essential stock market guide,now updated with even more timely and necessary information
Hard to believe, but this is the fifth edition of The Neatest Little Guide to Stock Market Investing, a book that just wont quit on the long-term seller list. Why? Because it presents a clear, concise, and highly effective approach to stocks and investment strategy, explained in a way that anybody can understand.
While its suitable for beginners, the book includes strategies that even seasoned pros will appreciate, chief among them its small-cap value averaging strategy that returns 3% per quarter, come what may, achieving an astounding 12.6% per year much better than the markets long-term average and leagues ahead of almost all professional money managers .
Other material from the books wealth of information:
- What has changed and what remains timeless as the economy recovers from the subprime crash
- All-new insights from deep historical research showing which measurements best identify winning stocks
- An exclusive conversation with legendary Legg Mason portfolio manager Bill Miller, revealing what he learned from the crash and recovery
- Thoroughly updated resources emphasizing online tools, the latest stock screeners, and analytical sites that best navigated recent trends
Praise for Jason Kelly
Praise for Jason Kelly
Investing Like Benjamin Graham
Benjamin Graham, widely known for his successful book The Intelligent Investor, thinks similarly to Buffett in the sense that you should withhold your emotions when investing. Graham suggests setting a formula to find stocks. He insists that you should ignore headlines and water cooler talk and instead use measurable criteria to choose quality stocks.
Graham recommends purchasing stocks that are priced close to their business valuation. He also advises using a margin of safety to choose stocks, which is simply the difference between the companys business valuation and market valuation.
With So Many Options For Smart Investing Where Does One Start
I recommend the permanent portfolios featured in my Neatest Little Guide to Stock Market Investing. The approach I take is to get started with something that’s proven and can bubble on the back burner while you figure out how to invest in individual stocks for even greater performance.Another simple way to dip a toe in the water is to just index. Buy the S& P 500 via an index fund and you’ll own the stock market. You won’t go bankrupt. You can’t make a big mistake. The value of your account will fluctuate, and that will teach the nature of stocks.Once you have an established core in a permanent portfolio or index fund, you can venture out into the woolly world of stock picking with a small amount of money at first, then larger amounts later when you’ve built confidence.
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A Guide To Investing For Beginners Smartassetcom
Instead, we require our money to make more money, which is one method of describing what investing is. When you invest, you use the power of substance interest. Heres how it works: You invest $8,000 and your investments grow 6% each year Left where it is, it will grow $480 by next year for a total of $8,480 in the account After another year passes with a 6% gain, your balance will jump by $508.
This basic mathematics formula can make it simple to determine what your prospective returns might appear like. Rather than attempting to comprehend the nuances of such a calculation, this tried and true faster way could prove to be important. There are so many ways to invest your money that it can feel rather overwhelming to many novices.
Book Review: The Neatest Little Guide To Stock Market Investing By Jason Kelly
Jason Kelly has issued a new 2013 edition to his perpetually best-selling The Neatest Little Guide to Stock Market Investing. It is a book that I heartily recommend for both beginning and experienced stock market investors. .
It is no accident that The Neatest Little Guide has been selling so well since the first edition in 1998. It is not only an accessible guide for newcomers, but it is also sophisticated in its investing strategies. The basic concepts remain timeless. Everything in the book is based on facts supported by sound reasoning. It is an intelligent approach. Terms are explained and used consistently. The writing style is conversational and accessible, with a nice dose of humor. But the book never becomes so informal that important concepts get shortchanged or mangled. As Kelly has taken the book through several editions, he has honed his ideas until they are razor-sharp and very clearly presented.
The Neatest Little Guide has 8 chapters, 3 appendices, and an index. The chapter titles themselves give a good presentation of what you will find here:
1. Speak the Language of Stocks
2. How the Masters Tell Us to Invest
3. How History Tells Us to Invest
4. Permanent Portfolios
5. Get Ready to Invest
6. Research to Riches
8. Bon Voyage
I want to highlight a few features that I believe give this book special value.
Chapter 2, How the Masters Tell Us to Invest, is a gem. In about 60 pages, it presents the basic ideas of six of the best stock investors ever. They are:
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What Is Smart Investing
Finding companies of interest to you, studying them carefully, knowing their typical price range, waiting for them to get cheap for no reason or a reason that makes no sense, then buying as much as you can to profit from the eventual recovery.Investing this way brings little stress because you know the companies well and time frames are long enough that you don’t have to care about what happened on Wall Street five minutes ago.
Investing And Researching Companies
If youre a beginner investor Kelly shows you exactly where to go to get started. He also highlights where you should begin your research for choosing quality investments.
To summarize Kellys advice he suggests that you begin your research with the following:
- Personal Experience
- Experience of friends or family
- Company Investment Packets
- Plus more
Dont worry. If youre just getting started investing Kelly will walk you through researching companies. But, just like the advice of the famous investors, in this book Kelly recommends that your best research starts with personal experience.
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Historys Lessons Of The Stock Market
Jason Kelly takes a look at various works on the history of the stock market. At the end of the chapter he sums it up using a quote from James OShaughnessy the data proves the stock market takes purposeful strides. Far from chaotic random movement, the market consistently rewards specific strategies while punishing others.
In this chapter Kelly also highlights the strategy used to choose the best value stocks. He goes in depth on several measurements you can use to determine stock values.
What The Critics Say
“Jason Kelly captured my investment methods well, and better than most who have tried to describe what I do.”
“Many investors want to know how and where to get started in investing and also improve their results. Jason Kelly does a terrific job of providing a plethora of resources, approaches, and ideas that will help any investor no matter their level of experience or aptitude.”
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How Can You Tell What Type Of Investment Is Right For You
I can make this real simple if you’re young: own stocks via index funds if you don’t want to do much work, and then if you want bonus performance spend some time learning about individual stocks, as I mentioned above.If you’re over 70, then be careful. Don’t go for growth go for safety. You don’t want any crises in your golden years.If you’re somewhere in between, ramp down the money you have in stocks as you get older, but not too quickly. People are living longer these days and need their money to go further, so some oomph from stocks is useful even into your 60s.Dividend paying stocks are a nice middle ground for some people. Because they pay a dividend, there’s profit from them even if the stock price stays the same or declines a bit. A steady stream of cash each quarter is nice to see, and adds up while you wait for the stock price to head higher as well.
Investing Like Peter Lynch
From 1977 to 1990 Peter Lynch managed the Fidelity Magellan Fund. He was able to grow this fund from $20 million to $14 billion during this time.
Lynch believes a good stock is one that will return 10 times your money. Lynch advises to invest in what you know and then divide your stocks into six categories: slow growers, stalwarts, cyclicals, fast growers, turnarounds, and asset plays. He advises to put stocks in categories so that upon selecting a new stock you know what youre buying.
While this book covers the investing strategies of six different professionals it also highlights what all six investors agree on:
- Automate Your Strategy with Proven Criteria
- Look for Strong Income Statements and Balance Sheets
- Look for Insider Stock Ownership and Company Buybacks
- Compare Stocks with a Proven Profile
- Conduct Thorough Research
- Buy at a Price Below the Companys Potential
- Keep or Buy More of Whats Working
- Take Advantage of Price Dips
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Jason Kelly: The Neatest Little Market Advice
Steve LeCompte|January 30, 2012|Posted in: Individual Gurus
We evaluate here the since late 2001. Jason Kelly is the author of the Neatest Little Guide series of financial books, The table below quotes forecast highlights from the cited source and shows the performance of the S& P 500 Index over various numbers of trading days after the publication date for each item. Grading takes into account more detailed market behavior when appropriate. Red plus signs to the right of specific forecasts indicate those graded right based on subsequent market behavior, while red zeros denote any complex forecasts graded both right and wrong. We conclude that:
- Jason Kellys style might be characterized as intermediate-cycle Buffet-like , focused on entry and exit points for a few stocks in the context of overall market climate. He sometimes buys, sells and rebuys the same stocks.
- Mr. Kelly looks to buy during states of maximum gloom stemming from what he regards as superficial indicators. Seasonal trends are an important consideration for him.
- Jason Kellys forecast sample is moderate, as is therefore confidence in the measurement of his accuracy.
See Jason Kellys article Stock Market Timing for his own thoughts on this subject. See also .
See Guru Grades for a snapshot of the accuracy of various experts in predicting the direction of the U.S. stock market, including links to evaluations of the commentaries of other individual market pundits and gurus.
Building Your Investing Strategy
Now that Kelly has thoroughly explained stock market jargon, stock valuations, several investing strategies, and how to research companies he shows you how to build your own investing strategy.
This book comes with worksheets to aid you in choosing quality stocks and a very thorough description on how to fill them out. This chapter is very detailed and will walk you through the whole investing process.
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The Neatest Little Guide To Stock Market Investingfifth Edition
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Review: The Neatest Little Guide To Stock Market Investing
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The Neatest Little Guide to Stock Market Investing by Jason Kelly is arguably one of the best books ever wrote regarding stock market investing.
If youre looking to increase your investing knowledge this book is an excellent place to start.
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The Neatest Little Guide To Stock Market Investing Book Review
The Millionaire Teacher. While that provided a good passive strategy, I knew that would be potentially leaving money on the table.
Luckily I stumbled upon another book that provides a much more comprehensive strategy. This book is called The Neatest Little Guide to Stock Market Investing by Jason Kelly. The great thing about this book is that it is especially geared towards the novice investor who just getting started in investing. It doesnt assume you are an experienced investor or that you already know all the various terminology. For me this was perfect as a guide to stock market investing. Kelly captured my investment needs perfectly.
I wouldnt be so quick to disregard this book if you do have investing experience, and knowledge of Wall Street, though. The author highlights several investment strategies that are easy to employ with the clear instructions provided, in a concise and highly effective manner. So it very well could give you some ideas on how to adapt your strategies to achieve a higher return on your investments and protect yourself against losses. It might be just what youre looking for to better streamline your strategy.
With this diversified approach, we are sure to find some strategies that suit our personalities and specific situations and that we can use in conjunction with tools such as a reliable stock screener.
Historical Plans For Reference Only
The only growth plans I run now are the ones in The Kelly Letter: 3Sig, 6Sig, and 9Sig. The letters combined 3-6-9 performance history is shown in the chart below. Following the chart, you will find the historical performance of other plans, for reference, through 2018 and 2016.
This page shows the performance of investing strategies I recommend in The 3% Signal, and The Neatest Little Guide to Stock Market Investing, and The Kelly Letter.
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Speak The Language Of Stocks
In the first chapter of this book Kelly explains not only how the stock market works and how it can work for you, but he also breaks down investing terms in a way that you can actually understand.
Ive never been able to so easily understand stock market concepts as I have in this book. Kelly does an excellent job of clearly explaining what you need to know about the stock market.
A Complete Guide To Investing For Beginners Resources & Tips
This happens if rates unexpectedly leap up. You will not lose cash on your bonds if you can hold them to maturity. If you need or desire to sell them, you might lose cash. Of all the fixed-income securities pointed out here, CDs are typically the safest.
You can take your money and put it into a second house or an financial investment home. Both kinds of financial investments can be leased to recover some or all of the money youre spending on the residential or commercial property for the year. Renting multiple properties can help you achieve an intensifying effect on your general month-to-month earnings.
Investing For Beginners: Investing 101 Good Financial Cents®
If you choose the area of the property well then holding it as a possession for multiple years can imply a great increase when you offer it one day. Many individuals believe that realty is the most steady investment a beginner can make keywords. Every investment technique falls someplace on the spectrum of low return/low danger to high return/high risk.
Those who go after the highest returns invest most heavily in stocks. On the other hand, if you are averse to risk or hesitate to invest in equities, you may stick to ETFs, shared funds, or bonds. This conscious choice leaves you open to the possibility of lower returns than if you invest mostly in stocks.
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