Thông tin tài liệu
by Kathleen Sindell, PhD
Investing Online
FOR
DUMmIES
‰
5TH EDITION
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Investing Online For Dummies
®
, 5th Edition
Published by
Wiley Publishing, Inc.
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Copyright © 2005 by Wiley Publishing, Inc., Indianapolis, Indiana
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About the Author
Kathleen Sindell is the author of Managing Your Money Online For Dummies
(Wiley, 2004), Safety Net: Protecting Your Business on the Internet (Wiley, 2002),
Loyalty Marketing for the Internet Age (Dearborn, 2000), The Unofficial Guide
to Buying a Home Online (Hungry Minds, 2000), and A Hands-On Guide to
Mortgage Banking Internet Sites, a separate directory published by Mortgage
Banking Magazine (2000, 1999, 1998, 1997). Dr. Sindell is a contributing author
to the Encyclopedia of Computer Science (Groves Dictionaries Inc., 2000) and
the online investing columnist for Investor Direct magazine (1999). She is the
author of The Handbook of Real Estate Lending (McGraw-Hill Professional
Publishing, 1996). Dr. Sindell is an expert on electronic commerce and is an
adjunct faculty member at the Johns Hopkins University MBA program. She is
the former Associate Director of the Financial Management and Commercial
Real Estate Programs for the University of Maryland, University College
Graduate School of Management & Technology.
Dr. Sindell provides consulting and publications about management, finance,
security, and real estate in the e-commerce environment. Her goal is to
improve the quality of life and economic well-being of people and business
organizations by providing information that they might not otherwise have
or understand.
She received her B.A. in Business from Antioch University, an MBA in Finance
from the California State University at San Jose, and a PhD in Administration
and Management from Walden University, Institute for Advanced Studies.
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Dedication
This book is dedicated to my dear friends Arlene Meilich and Gail Pasternack.
Author’s Acknowledgments
Investing Online for Dummies, 5th Edition, illustrates the latest trends in
online investing and represents my desire to help people take control of their
finances by accessing high-quality Web-based investing information. My grati-
tude and thanks to Bob Woerner, senior acquisitions editor, for his guidance.
Development editor Mark Enochs made working on this book a joy. My appre-
ciation to Andy Hollandbeck and Teresa Artman for their excellent copy edit-
ing. It was a pleasure to work with technical editor Dan Chesler. I am also
grateful to the many folks who work behind the scenes at Wiley Publishing.
It was a delight to work with my literary agent, Carole McClendon, and all
the folks at Waterside Productions on this fifth edition of Investing Online
For Dummies.
A very special thank you to my brother-in-law, Gerald Sindell, for his pro-
found counsel on everything relating to the business of publishing.
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Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our online registration form
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Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial,
and Media Development
Project Editor: Mark Enochs
Senior Acquisitions Editor: Bob Woerner
Copy Editor: Andy Hollandbeck
Technical Editor: Dan Chesler
Editorial Manager: Kevin Kirschner
Media Development Manager:
Laura VanWinkle
Media Development Supervisor:
Richard Graves
Editorial Assistant: Amanda Foxworth
Cartoons: Rich Tennant (
www.the5thwave.com)
Composition Services
Project Coordinators: Emily Wichlinski,
Nancee Reeves
Layout and Graphics: Carl Byers,
Andrea Dahl, Lauren Goddard,
Denny Hager, Joyce Haughey,
Barry Offringa, Lynsey Osborn,
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Proofreader: Kelly Ewing, Leeann Harney,
Jessica Kramer, Carl Pierce
Indexer: TECHBOOKS Production Services
Special Help: Teresa Artman
Publishing and Editorial for Technology Dummies
Richard Swadley, Vice President and Executive Group Publisher
Andy Cummings, Vice President and Publisher
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Mary C. Corder, Editorial Director
Publishing for Consumer Dummies
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Composition Services
Gerry Fahey, Vice President of Production Services
Debbie Stailey, Director of Composition Services
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Contents at a Glance
Introduction 1
Part I: Online Investing Fundamentals 9
Chapter 1: Finding Investor Stuff on the Net 11
Chapter 2: No Experience Required: Getting Started with Online Investing 31
Chapter 3: Making Your Money Work Harder 47
Chapter 4: Selecting an Online Broker That’s Right for You 63
Chapter 5: Getting Ahold of Trading Online 81
Part II: Finding the Right Investments 97
Chapter 6: The Keys to Successful Internet Mutual Fund Investing 99
Chapter 7: Online Analysis, Buying, and Selling of Mutual Funds 121
Chapter 8: The Basics of Stocks and Rates of Return 141
Chapter 9: Internet Stock Screening 159
Chapter 10: Using Company Information to Make Investment Decisions 175
Chapter 11: Digging Deeper: Advanced Stock Analysis 195
Chapter 12: Going with Fixed-Income Securities:
Which Type of Bond Is for You? 221
Chapter 13: Valuing, Buying, and Selling Bonds Online 243
Part III: Expanding Your Investment Opportunities 263
Chapter 14: Going International Online 265
Chapter 15: Looking for the Next Big Thing: IPOs, DPOs, and DRIPs 281
Chapter 16: Taking the Option: Alternative Investing 301
Chapter 17: The Internet and Managing Your Portfolio 315
Part IV: The Part of Tens 337
Chapter 18: Ten Warnings About Cyberfraud 339
Chapter 19: Ten Important Selling Points 353
Chapter 20: Ten Green Flags for Buying 365
Index 373
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Table of Contents
Introduction 1
Who Are You? 1
About This Book 3
How to Use This Book 4
How This Book Is Organized 4
Part I: Online Investing Fundamentals 5
Part II: Finding the Right Investments 5
Part III: Expanding Your Investment Opportunities 5
Part IV: The Part of Tens 6
What’s New 6
Icons Used in This Book 7
Feedback, Please 7
Part I: Online Investing Fundamentals 9
Chapter 1: Finding Investor Stuff on the Net . . . . . . . . . . . . . . . . . . . . . .11
Building Your Own Online Information System 11
Identifying new investments 12
Analyzing investment prospects 13
Purchasing investments 14
Monitoring investments 15
Selling investments 15
Setting Up Your Basic Investment Search Strategy 16
Metasearch engines 16
Popular search engines 17
Selecting the best search engine 19
Understanding How Newsgroups Can Help You 20
Finding the perfect newsgroup 21
Finally, some investor news reading 21
Getting the Message from Investor Message Boards 22
Uncovering Investor Information from Mailing Lists 23
Using Free and Fee-Based Online Investor Databases 24
Totally free databases 24
When all else fails — fee-based databases 25
Getting Online Investor Information Geared to Your Needs 26
Investor Web sites for children 27
Web sites for young investors 27
Other investor special-interest sites 28
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Chapter 2: No Experience Required: Getting
Started with Online Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Getting Smart Online 32
Online investor tutorials 32
Web sites for new investors 34
Glossaries 34
Maximizing Your Internet Browser with Bookmarks 36
News You Can Use 37
Large news organizations 38
Newspapers 38
Magazines 39
Scholarly journals 40
Multimedia investment news 41
Electronic newsletters 41
Practicing with Your New Investment Information 43
Join the club! Become a member of an investment club 43
Getting into the game: Online investment simulations 44
Chapter 3: Making Your Money Work Harder . . . . . . . . . . . . . . . . . . . .47
Using the Internet to Make Financial Planning Easier 47
The joys of compound interest 48
Moving Some of Your Savings to Investments 50
Maximizing Your Investments with Tax-Deferred Accounts 51
Traditional IRAs 52
Roth IRAs 52
Online calculators for determining the best IRA account 53
Deciding How Much Risk You Can Take 54
Determining How Much You Can Invest 55
Investing in Securities That Meet Your Goals 55
Checking Out What the Experts Are Doing 56
Analyzing the analysts 56
Getting the opinions of others: Stock-picking communities 57
Judging who’s the real deal 58
Tracking and Measuring Your Success 59
Building Your Personalized Investment Plan 60
Chapter 4: Selecting an Online Broker That’s Right for You . . . . . . . .63
Is a Traditional Broker Best for You? 64
Selecting a Premium Online Brokerage 65
Selecting the Right Discount Online Brokerage 66
Investigating a Brokerage Before You Invest 67
Matching Your Needs to the Right Online Brokerage 67
For beginners 68
For mainstream investors 68
For active investors 70
For affluent investors 70
Investing Online For Dummies, 5th Edition
x
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Getting Online Trading Services for Less 72
Trading online for $15 or less 73
Finding online brokers with no or
low initial account minimums 74
Rating Online Brokers 76
Checking Out Hybrid Online Banks and Brokerages 77
Opening Your Online Brokerage Account 79
Chapter 5: Getting Ahold of Trading Online . . . . . . . . . . . . . . . . . . . . . .81
Understanding the Tax Consequences of Trading Securities 81
Special rates for long-term capital gains 82
Measuring capital gains 83
What about capital losses? 83
Increasing Profits with Simple Order Specification Techniques 84
ECNs — It’s Not Your Grandfather’s Market Anymore 86
How ECNs work 86
Understanding inside spreads 87
Extended-Hours Trading 88
Sources for extended-hours stock information 89
Join the extended-hours club 89
Online Trading and the Active Investor 90
Active investor trading platforms 91
You might be a day trader if . . 93
Going from Hardwired to Wireless Trading 94
Part II: Finding the Right Investments 97
Chapter 6: The Keys to Successful
Internet Mutual Fund Investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
Mutual Fund Basics 99
Discovering the differences between open-end
and closed-end mutual funds 102
Minimizing fees 103
A Fund for You, a Fund for Me 104
Finding Facts and Figures Online 106
Simplifying Your Investing with Mutual Funds 107
Discovering index funds 107
Becoming aware of exchange-traded funds 108
Mutual Funds and Your Risk Tolerance Level 110
How to Screen Mutual Funds Online 111
Locating and Reading the Prospectus 113
Checking the facts 114
Getting it right 115
Analyzing Mutual Funds 116
Comparing costs and returns 117
Understanding mutual fund risks 118
xi
Table of Contents
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Chapter 7: Online Analysis, Buying, and
Selling of Mutual Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Finding the Right Mix of Investments 121
Using the Internet to Help You Choose
the Best Funds in Each Class 124
Following a mutual fund checklist 125
Reading an online mutual fund listing 126
Assessing mutual fund performance 127
Using Scoreboards and Ratings 128
The Ratings War 130
The Morningstar rating system 130
The Lipper Leader system 131
The Value Line rating system 131
Buying Mutual Funds Online: Using an Online Broker 132
Commission-Free Mutual Funds 133
Starting Your Mutual Fund Account with as Little as $50 135
Buying Mutual Funds Online: No Broker Needed 136
The Right Time to Sell Your Mutual Funds 137
Chapter 8: The Basics of Stocks and Rates of Return . . . . . . . . . . . . .141
Understanding Stocks 141
Participating in the Market 142
Common stocks 142
Preferred stocks 143
Picking the Right Stock for the Right Goal 143
What Does the S & P 500 Have to Do with Anything? 145
Paying the Right Price 147
Getting down to fundamentals 147
Using online tools to value stocks 148
Using the Net to calculate fair value 149
Valuation model input and results 151
Analysis for value shopping 153
Getting technical: Technical analysis 154
Technical analysis software 156
Market timing 157
Chapter 9: Internet Stock Screening . . . . . . . . . . . . . . . . . . . . . . . . . . .159
Finding the Best Stock Using the Net 159
Choosing the criteria for your first stock screen 160
Fine-tuning your stock screen 161
Using your stock screen results 161
Important ratios for screening stocks 161
Starting with Quick Online Stock Screens 165
Using Those Terrific Prebuilt Stock Screens 166
Locating Those Prebuilt Screens You Can Change Yourself 166
Investing Online For Dummies, 5th Edition
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[...]... been added to this edition that make using Investing Online For Dummies an even more exciting and beneficial reference book Changes throughout Investing Online For Dummies, 5th Edition, include new investor-related Web sites and updated information about Web sites that now require user registration This revised edition shows how some Web sites now charge fees for access and provides alternative Web sites... sindell.com 7 8 Investing Online For Dummies, 5th Edition Part I Online Investing Fundamentals T In this part he chapters in this part help you discover why the Internet should be your starting point for researching investments You find out how to develop your own online investment information system that is geared to your specific requirements These chapters point you to a variety of online investor... monitoring of investments can be time-consuming Online investing really is work ߜ Partner with the Internet in making your money work harder for you Introduction About This Book This book has no hidden agenda It focuses on common-sense ways to create and build wealth with the Internet I’ve designed Investing Online For Dummies, 5th Edition, for beginning online investors, but experienced investors can... rewards The following sections summarize online sources of the information you need for each step Knowing what type of information you need and where to get it online can help you build your personalized online information system Identifying new investments Before investing, you need to clearly state your financial objectives and know your risk-tolerance level This information can help you determine your... you become an online investor for as little as $25 a month ߜ Uncovering how stock options work and determining the value of your employee stock option plan ߜ Finding out how to take advantage of international opportunities online Additionally, I offer warnings to help you avoid dangerous or costly traps, and I point out excellent online investment resources Investing Online For Dummies, 5th Edition,... that a mistake may cost you money), try practicing at the Investing Online Resource Center, located at www.investingonline.org The Investing Online Resource Center includes a free stock market simulation center You can testdrive online investing or try out a new investment strategy without losing a dime or having to register If you’re new to investing on the Internet, check out the first three chapters... information about stock options, and how to evaluate the value of your employee stock option plan This part of the book also covers online portfolio management and explores some of the latest tools available online 5 6 Investing Online For Dummies, 5th Edition Part IV: The Part of Tens No more guessing about what to hold and when to fold Part IV provides handy top-ten lists packed full of ready online. .. investor or an experienced trader, this book can guide you to the Internet-based resources that can help you make better, more informed investing decisions than ever before The Internet offers an astounding amount of financial information, and Investing Online For Dummies, 5th Edition, provides clear instructions and ample illustrations so that you don’t get lost in cyberspace With the assistance of... survey goes on to state that 2 Investing Online For Dummies, 5th Edition ߜ On a typical day, between 1 and 3 percent of all Internet users buy or sell stocks, bonds, or mutual funds online Additionally, online investing grew by 40 percent from March 2000 (10 million Americans) to September 2002 (14 million Americans) ߜ More men than women are likely to buy or sell stock online As a matter of fact, the... xvii xviii Investing Online For Dummies, 5th Edition Chapter 20: Ten Green Flags for Buying 365 Digging Out of a Recession with Dollar-Cost Averaging 366 Buy If the Stock Is at Its Lowest Price .367 Invest in Companies with Beautiful Balance Sheets 367 Check Out the Earnings Forecast .368 Watch for Stocks That Are Trading under Book Value 368 Look for Strong . by Kathleen Sindell, PhD Investing Online FOR DUMmIES ‰ 5TH EDITION 01_584561 ffirs.qxd 3/10/05 7:13 PM Page i Investing Online For Dummies ® , 5th Edition Published by Wiley Publishing,. Before You Invest 67 Matching Your Needs to the Right Online Brokerage 67 For beginners 68 For mainstream investors 68 For active investors 70 For affluent investors 70 Investing Online For Dummies, . you make better, more informed investing decisions than ever before. The Internet offers an astounding amount of financial infor- mation, and Investing Online For Dummies, 5th Edition, provides
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