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Personal Finance > Ask the Expert
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Wall Street 101
I'm a student who wants to learn the ins and outs of investing and the economy. But where to start?
August 26, 2002: 11:57 AM EDT
By Walter Updegrave, CNN/Money Contributing Columnist

NEW YORK (CNN/Money) - I'm a 19-year-old college student who wants desperately to learn the ins and outs of investing and the economy. But where to start? My family's best advice is to read the Wall Street Journal diligently, as if I'll become a power-house investor by pure osmosis, but I don't even know what all the little abbreviations and percentages mean! What do you suggest?

-- Young and In the Dark, but Wanting to Invest, Las Vegas

Ah, it's so refreshing to know that the younger generation has that thirst for knowledge, that insatiable appetite for learning, that fundamental yearning to broaden their horizons. Now, myself, I had no time for such constructive pursuits when I was a student. I was too busy checking out local bars and watering holes (purely for sociological research, of course), but that's another matter...

I have a few recommendations -- some in book form, others online -- that can give you a solid background in economics, finance and investing without totally confusing or boring you to death. For a broad overview of how the financial markets work, I suggest you pick up a copy of "The Wall Street Journal Guide to Understanding Money & Investing."

What I like about this book for beginners is that it's relatively slim and filled with nifty graphics and plenty of neat factoids, like explaining how Wall Street got its name (hint: there was a wall there) and how the term "bear market" came into use. It also tells you how to read various parts of the financial pages that, without such a guide, can seem like just so much gibberish splashed across the page. (Actually, even once you know what this stuff means it can seem like gibberish, but that's another matter...)

Investing fundamentals

Now, for a bit more about the fundamentals of investing, I suggest you check out our very own Money 101: An Interactive Course On Managing Your Personal Finances. What you'll find is a series of 23 lessons covering everything from budgeting to banking and saving to investing in stocks and mutual funds to insurance to retirement planning -- in short, virtually all the topics you'll have to deal with once you leave the cozy confines of academia.

As a student, you'll also appreciate that each of these lessons has a little interactive quiz so you can test yourself to see whether the information you're taking in is finding a resting place in the old cerebrum or, as was so often the case during my brilliant academic career, going into one proverbial ear and out the other.

Once you've plowed through, I mean, thoroughly enjoyed the "Wall Street Journal Guide" and our Money 101 lessons, I think you will be more than ready to tackle the Journal. That's not to say you won't still find some stories confusing -- I, for one, find all stories that report on the ups and downs of the balance of trade deficit totally incomprehensible. But you will certainly have enough background so that you can appreciate what is going on in the economy and the markets.

Other resources

If you would like to continue your financial education, there are plenty of other books you can check out. I would recommend "Winning the Loser's Game: Timeless Strategies for Successful Investing" by Charles D. Ellis, a classic that explains how so many investors cause harm to themselves by trying in vain to beat the market.

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And while Penn professor Jeremy Siegel's "Stocks for the Long Run" isn't exactly beach-reading material, it does provide the theoretical case for investing in stocks for long-term goals like retirement. And since I'm plugging so many other books, I'll also shamelessly plug my own: "Investing For the Financially Challenged". Though hardly in the league with Siegel or Ellis in terms of quantitative rigor, I like to think my opus minor tells non-MBA-finance-major types what they need to know to become successful investors while providing a few laughs along the way.

By the way, if you read all these recommendations and actually end up understanding those Wall Street Journal stories on trade deficits and what not, would you mind e-mailing me an explanation?


Walter Updegrave is the author of "Investing for the Financially Challenged" and can be seen regularly Monday mornings at 8:40 am on CNNfn.  Top of page




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