Investing in Shares For DummiesThe very basics!
When i first started doing research into purchasing shares in companies i purchased several books, however one book a friend had purchased for me stuck out above the rest when it came to providing information on all the basic concepts of investing.
Investing in Shares For Dummies sets out not only to give you all the details you need on purchasing shares and what the concept of share ownership means for you and your personal finances, but it also makes an extremely handy reference book to keep coming back to. For instance if you want a quick recap on how interest rates could effect shares and bond prices, they have a chapter for that where they lay it out clearly over several easy to understand pages. The same goes for Analyzing Industries and ways to price companies.
There are sections for understanding CFD's and going short on shares, using leverage to buy shares on margin and so on. These sections thoroughly go through the risks of using margin, equating it quite rightly to using a loan to buy and sell shares, at the same time the book doesn't talk down to people who use these methods of trading and simply list the risks as well as the upsides of having access to the capital margin provides.
Although the book goes over pretty much all aspects of the stock market and i highly recommend it for people who are just beginning with their investments as well as people who want to have a reference book around, when it comes to dividend investing there isn't much to be seen here.
When it comes to dividends, Investing in Shares For Dummies does go over the subject several times, what they are, their tax status and using drips. The book even goes into inflation and interest rate dividend sensitivity. Everything is here to get a full understanding of the compounding effect dividends can have on a portfolio. As i said before this makes a great reference book to continue to look back to.
One section of the book i very much liked was the chapter on personal finance, here we delve into your financial situation and what part shares play in your personal asset allocation. Your shown how to calculate your net worth and go through your personal balance sheet and cash flow. The importance of having several months worth of living expenses put aside in a bank account for emergencies is here too, while important, i have personally found this is more crucial at the start of your investing career when you may only have a small portfolio with a few companies. Once your portfolio grows your dividend cashflow and the number of companies usually offset the need for a bigger savings in cash.
Isa's and tax wrappers are also talked about here, giving you a rundown of how to avoid paying all taxes on your dividends and capital gains for uk residents.
I find myself repeatedly grabbing this book from my bookshelf for references when needed as its laid out in such a way to allow easy navigation to the specific information you need, effects of inflation on share prices and so on.
All the information I listed above is just going over 5 chapters of this book with 25 chapters on incredibly useful reference material for trading and investing in the stock market as well as personal finance.
I would highly recommend this book not just for beginners but for investors on all levels just due to the amount of information that can be gained from a moments noticed when needed.
Buy Here: Investing In Shares For Dummies.