101 Things Every Investor Should Know! All you need to succeed--the lowdown on stocks, mutual funds, the economy and more
By Compiled by the Writers and Editors of MONEY

(MONEY Magazine) – WISDOM

1 You have an advantage over the pros. Professional money managers are judged by whether they beat the market from quarter to quarter. They don't always have the luxury of holding on--or buying more--when a stock tanks. But there's no such scrutiny of your performance. When the markets go crazy, you can simply sit tight, calmly focusing on the long term. As the great investor Benjamin Graham said long ago, that is the "basic advantage" that individuals have over the pros. Use it!

2 Asset allocation is more important than trying to find the next Microsoft. Over long periods, the returns you get on your stock and bond investments will tend to match the historical averages, so the key factor in your results will be how much of your money you keep in stocks and how much in bonds. Once you've made that decision, you can focus on picking specific stocks, bonds and funds.

3 You can retire comfortably without ever learning how to pick a stock. Put 60% of your money in a total stock market index fund and 40% in a total bond market index fund, and over 10 years or more you will outperform most individual and professional investors.

4 All investing involves taking risks.

5 Diversification is the wonder drug of the investing world. Spreading your investment stake over different types of stocks and bonds lowers the odds that you will lose money--and raises the odds that you will make money.

6 Over the long term, stocks have returned more than bonds, and bonds more than cash. That doesn't mean they always will.

Average annual returns from 1926 to 2003

STOCKS 10.4% BONDS 5.4% CASH 3.8%

NOTES: Stock returns are for the S&P 500; bonds are long-term government bonds; cash is the 30-day Treasury bill. SOURCE: Ibbotson Associates.

7 Remember regression to the mean. Athletes, a superstitious bunch, call it the "Sports Illustrated cover jinx"--the tendency of sports stars to fall into major slumps after taking a turn as a cover boy or girl. The same thing happens with hot companies: Amazon's stock still hasn't recovered from CEO Jeff Bezos' turn as Time's 1999 Person of the Year. But as mathematician John Allen Paulos notes, what looks like voodoo is often little more than regression to the mean. Investors tend to get excited about companies that have had periods of exceptional out performance--the equivalent of flipping "heads" 10 times in a row. But no one can defy the odds forever: Even the fastest-growing companies tend, over time, to revert to growth rates closer to their industry average. Think twice about paying extra for those high fliers.

How to time the market--and how not to

8 Don't pull money in and out of the market trying to catch highs or lows. Researchers have yet to find a single measure that correctly tells when the market has hit a top or reached a bottom. They probably never will.

9 Dollar-cost average. Investing a fixed dollar amount every month or every calendar quarter is the single best way to strap yourself in and stay the course.

10 Rebalance. Let's say you want 60% of your money in stocks and 40% in bonds. If stocks go on a tear and amount to 75% of your total portfolio, sell enough of them to get yourself back to 60-40. That way, you'll always sell a little of what's become more expensive and buy what's become less expensive. It's an automatic way to buy low and sell high.

11 Earning a high return requires taking more risk, but taking more risk doesn't necessarily lead to a higher return. It's only natural that high-return investments are linked to higher risk. Without the lure of loftier gains, we'd never venture beyond the most secure investments. But that doesn't mean we always get the bigger gain we expect. During bull-market feeding frenzies, we may lose by grossly overpaying for a stock. Or the company we saw as a winner may simply crash and burn.

12 You can't know how much risk you can tolerate until you've tasted real losses. Like love or a bad case of food poisoning, risk is something that is hard to understand in the abstract--a harsh fact that the Nasdaq crash brought home to countless tech investors who thought themselves invulnerable.

13 There's more to the stock market than the Dow. The Dow Jones industrial average contains 30 of the largest, most familiar companies in the U.S., encompassing all sectors except utilities and transportation. Standard & Poor's 500-stock index includes 500 companies spread over more industries. As a result, the S&P 500 has become the measuring stick of choice for investment professionals. Other indexes include the Nasdaq composite, which contains all the companies traded on the Nasdaq; the Wilshire 5000 total market, which now contains more than 7,000 stocks that trade in the U.S.; and the Russell 2000, which measures the performance of smaller stocks that are typically excluded from other indexes.

14 The rule of 72. A handy trick to approximate how long you need to double your money: How many years will it take to turn $1,000 into $2,000 at 8%? Just divide 72 by eight to get nine years.

How to make your money work for you

15 Tap into the power of compounding. If you earn 6% on a $1,000 bond and spend your interest every year, after 20 years you will have received $1,200. But if you can reinvest your interest at 6%, you'll net $2,262. That's the power of compounding--your profits make profits.

16 Start early. With compounding, the more time you give it, the better it works. Here's an example: Let's say one person invests $100 a month for 15 years starting at age 25 and then stops adding money to his stake. Another person puts away $100 a month for 25 years starting at age 40. Which one ends up with more money at age 65? The early starter, by far.

17 Save more. Another way to tap into the power of compounding: Put away a few more dollars each month. Over time, those dollars will turn into thousands.

18 When planning for long-term goals, assume that your overall portfolio will earn 5% to 6% a year.

19 Some things are best left to the pros. It is almost impossible for an individual to make money in the commodities markets. You are up against professional traders with far more knowledge than you have, and the costs of buying and selling are enormous.

20 When you buy a stock, you think it'll be a winner. But you're buying it from someone who's happy to let it go.

21 Don't rely on the regulators. Sure, asleep-at-the-switch regulators deserve at least some blame for the recent stock and fund scandals. But even as the Securities and Exchange Commission scurries to make up for lost time--and to keep up with a certain ambitious attorney general from the State of New York--investors need to be realistic about what the government can and can't do. Regulators can certainly be more aggressive in rooting out fraud and forcing companies to disclose more and better information. But the plain fact is that investors haven't always made good use of the information they already have at their disposal. How many investors really read the risk statements in IPO prospectuses before making their bets? No amount of regulation can force investors to behave prudently--or keep markets from going down.

22 Never let tax considerations be the main driver of an investing decision.

23 Nothing tops the 401(k). It's a triple threat: You don't pay taxes on the money you contribute, and you get matching funds from your employer and tax-deferred growth. No other investment offers that potent combination.

24 Watch what you watch. Want to increase your returns? If you find yourself in front of a TV in the middle of the day, don't flip over to the business channel. You really don't need to know what's happening to semiconductor stocks at 2:37 on some random Tuesday afternoon. Watch Oprah, or the Jerry Springer Show, or VH1 Classic instead. No, you won't get any good investing insights, but at least you won't be tempted to trade--a surefire way to increase your investing costs and weigh down your returns. The biggest risk? That the Springer show so erodes your faith in humanity that you pull all of your money from the market and hole up in a cabin in the woods.


25 There's a difference between investing and speculating. Investors think of a stock as a share in a business they'd like to own for the long term. Speculators see stock as paper they buy now in the hope that someone will pay more for it down the road.

26 Earnings drive stock prices. There may be wide discrepancies from one year to the next, but as investing titan Peter Lynch notes, over the long term stock prices tend to follow the path of corporate earnings.

27 Don't discount dividends. Over the long term, dividends have accounted for about 40% of the return from stocks. And that was before the recent tax break, which may lead more companies to pay dividends.

28 The two-minute drill. Another tip from Peter Lynch: Before you buy a stock, be ready to give a brief spiel--to yourself, a skeptical spouse, your dog, it doesn't matter--explaining why the stock's a buy. Is it a fast grower, a dull but solid value play, a turnaround story? Does its business strategy make sense? Is the balance sheet healthy? Does it dominate its rivals? Simple as it sounds, this forces you to focus your thoughts and your research. And it may help you avoid losing money on hot biotech stock tips from your dentist.

29 The bear case. While you're at it, take two more minutes to elucidate the reasons for not buying the stock. Is the company neck-deep in debt? Are hungry competitors nipping at its heels? Is the CEO as slippery as an eel? Is the stock simply too expensive for its own good? Mastering the bear case will not only help you to understand the company--it will help you figure out when you might want to sell.

30 Great companies don't necessarily make great stocks. It seems simple: If you invest in only the best companies out there, your returns should be stellar as well. But great companies can falter, and if you pay too much for the stock, your returns may be less than great.

31 A $2 stock can be expensive. A $100 stock can be cheap. What counts isn't the share price, but the amount you're paying for each dollar of the company's earnings, sales, assets or cash flow--which you learn by checking out the stock's valuation ratios.

32-35 Four ways to value a stock

-- Price/earnings ratio. By far the most commonly used measure, P/E (a company's share price divided by its earnings per share) tells you how much you're paying for each dollar of a company's profits.

-- Price/sales ratio. This figure can be used to identify companies with solid franchises but depressed profit margins that may be ripe for a turnaround.

-- Price/cash-flow ratio. The earnings number that companies report is the product of complicated accounting rules that can be manipulated. Cash flow from operations may offer a truer picture.

-- Price/book-value ratio. This looks at the net value of the company's plant, equipment and other assets. It's often used to find takeover targets.

36 The difference between forward P/E and trailing P/E. Trailing P/E is based on the company's earnings in the current year or from the previous four quarters. Forward P/E is a guess based on the company's expected earnings for the coming year or next four quarters.

37 The difference between a growth stock and a value stock. A growth stock offers the promise of much higher profits tomorrow, while a value stock may sell for less than the true worth of its assets today. Growth stocks are like oil wells: Some turn into gushers, but many turn out to be dry holes. Value stocks, on the other hand, are like kitchen faucets, providing a more reliable and moderate flow of earnings. Over long periods, value stocks have slightly outperformed growth, in part because they tend to fall less in bear markets.

38 The best way to find a cheap growth stock. One tool to use in determining whether a growth stock is selling at a reasonable price: the PEG ratio. To calculate a company's PEG ratio, divide its forward P/E by its expected earnings growth rate. If the PEG is less than 1.2, the stock is a potential bargain.

39-41 Stocks come in all sizes. Size usually means market value or market cap (for capitalization), which is a company's share price times the number of shares outstanding. General Electric is a $340 billion company because it has 10 billion shares trading at about $34. The breakpoints can vary, but in general:

-- Large-cap stocks have market values of $5 billion or more.

-- Midcaps: market values $1 billion to $5 billion.

-- Small-caps: market values under $1 billion.

42 You can begin to build a diversified portfolio of long-term growth stocks with as few as nine companies. When constructing a basic stock portfolio, it's smart to start with dominant companies in five of America's most dynamic growth industries: For example, you could choose Microsoft in technology, Pfizer in pharmaceuticals, Citigroup in financial services, Viacom in media and Procter & Gamble in consumer products. Add inflation protection and exposure to basic industries with Union Pacific in transportation, Anadarko Petroleum in energy, Alcoa in commodities and land developer St. Joe.

43 Don't put more than 10% of your money in your company's stock. If you are forced to hold more than that--perhaps because of rules in your company's 401(k)--try to offset the risk by investing in areas that do well when your own industry suffers. For example, if you work for a high-tech company, load up on dividend-paying industrial stocks.

44 Don't put more than 10% of your stock money into one company. Corporate flameouts like Enron and WorldCom have served to underscore the point: A very concentrated portfolio dramatically increases volatility and the risk of catastrophic loss.

45 Stock splits don't make you richer. When a stock splits, you're no better or worse off than you were before. After a two-for-one split, for example, you end up with twice as many shares, but they're trading at half the price. But some investors see splits as a sign that the company expects good times. And studies have shown that stocks that split do slightly better than those that don't over a one- to three-year period following the split.

46 Most big mergers don't benefit investors. Experience shows that it doesn't pay to invest in acquisitions. The reason: Most companies overpay when they buy other companies, negating any benefit from "synergies." Only investors who own shares of an acquired company before the deal is announced win, and you'd have to be clairvoyant, or a crook, to get that right consistently.

47 Where to find company filings. The best way to learn about a company is by reading its quarterly and annual reports--the 10-Qs and 10-Ks. You can find those and other financial filings at www.sec.gov. Click on Search for Company Filings and then type in the company's name.

48 Dogs of the Dow. This is the strategy of buying the 10 highest-yielding Dow stocks each January, holding them for a year, then selling the ones that have dropped off the list and buying the stocks that replaced them. The system was said to beat the market, but it hasn't worked all that well lately; for the 10 years ending in 2003, the strategy returned an annual average of 12.9% while the S&P 500 index gained 13% a year.

49 IPOs don't pay. During the Internet mania, everyone wanted to get in on initial public offerings. But IPOs don't pay off in the long run. They make most of their money on the first day of trading. After that, the typical new issue trails the market over the next three years.

50-52 Three good reasons to sell a stock. Don't unload a stock just because it has fallen, or because the market is in a slump. Valid reasons to get out:

-- One, something significant about the company's business or its earnings prospects has changed since you bought it.

-- Two, you recognize that your original assessment of the company's business or earnings prospects was mistaken.

-- Three, the stock is doing too well--the share price has risen above what you believe the company is actually worth, or the stock now makes up too big a part of your portfolio.


53 The more you trade, the lower your returns are likely to be. The more often you buy and sell, the better your portfolio has to perform to compensate for the higher trading costs. Think you'll outsmart the market with your clever ideas? A study showed that pension fund managers would have increased their returns by not trading at all. If frequent trading hurts the professionals, chances are it will hurt you too.

54 How to buy stocks without a broker. Hundreds of companies sponsor direct investing plans, or DIPs, which allow you to buy shares from them without paying a brokerage commission. Even more companies offer DRIPs, or dividend-reinvestment plans, which plow your dividends back into stock purchases. Info abounds on the Web at sites like netstockdirect.com.

55 How buying on margin works. You borrow money from your broker--paying interest--to buy more stock than you could on your own. That gives you a shot at bigger profits--and bigger losses. If your stock falls below a certain level, your broker will issue a margin call, requiring you to repay some or all of the loan immediately. Buying on margin is a risk most investors should avoid.

56 How short-selling works. A short-seller borrows shares from a broker and sells them, hoping the price will fall so he can buy them back later at a lower price. The costs are high, the potential losses enormous, and even lousy stocks can rise for remarkably long periods before coming back down to earth. This is another strategy most investors should shun.

57 The difference between a market order and a limit order. When you place a market order with your broker, you're asking to buy or sell shares at whatever price is available. A limit order directs the broker to buy or sell at a specific price, which can be useful protection in a volatile market. If the stock doesn't reach that price, no trade occurs.


58 The fundamental law of bond investing. Bond prices fall when interest rates rise, and vice versa. Why? If you own a bond paying 6% and rates rise, someone can now buy one paying 7%, so your 6% bond is worth less.

59 If you hold individual bonds to maturity, you almost never lose your money. U.S. government bonds, or Treasuries, never default. Municipal bonds and investment-grade corporate bonds rarely do, with long-term default rates of less than 1% and 2%, respectively.

60 Selling a bond before maturity can be costly. Bonds are not like stocks--they don't always trade every day, and there's not always a willing buyer around when you want to sell one. So if you have to unload a bond, you may have to accept much less than its current value.

61 How to ladder. In a bond portfolio, hold bonds of different maturities so that you have some coming due every couple of years. This allows you to take advantage of higher rates while limiting your risk.

62 You can lose money in a bond fund. Every day, the value of the bonds in a fund's portfolio fluctuates, depending on moves in interest rates and other factors. The fund's net asset value (its share price) changes accordingly. So when you sell bond fund shares, the price may be lower--or higher--than when you bought them.

63 The inflation-proof investment. The Treasury's inflation-indexed securities, known as TIPS, are guaranteed to keep pace with inflation. The value of your bond adjusts twice each year to match changes in the consumer price index--so your interest payment rises too (even though the rate remains the same). You are taxed on the increase in the bond's value, so TIPS are best held in a tax-sheltered account like an IRA. Three mutual funds that focus on TIPS: Vanguard Inflation-Protected Securities, Fidelity Inflation-Protected Bond (both no-load) and Pimco Real Return Bond, sold through brokers with a 3% load. The Treasury's I Bonds offer similar protection.

64 How a zero-coupon bond works. Zero-coupon bonds do not pay interest; instead, you buy them at a steep discount to their face value. When the bond matures, you receive that amount, which is your initial investment plus interest. For example, you could pay $6,659 and get a $10,000 zero that yields 4.15% and matures in 10 years.

65 What zeros are good for. Zeros are useful when you want to have a specific amount of money at a set time in the future--for example, for a child's education. One catch: You must pay federal, state and local taxes on the imputed or "phantom" interest that accrues each year, so it's best to hold zeros in a tax-sheltered account such as a Coverdell.

66 What junk bonds are. Bonds that receive low grades from credit rating agencies such as Moody's or Standard & Poor's are known as junk, or high-yield, bonds. Because they are riskier, they have to pay higher yields to attract investors. The best way to invest in junk bonds is through a mutual fund such as Fidelity High Income or Northeast Investors Trust.

67 Munis aren't the only bonds that get a tax break. Interest on municipal bonds is generally free from federal, state and local taxes. Treasury bond interest is not subject to state and local taxes, but it is subject to federal taxes.

68 How to tell if a muni is right for you. If you want to see whether you'd earn more money from a tax-exempt bond than from a taxable one, you need to know the tax-equivalent yield. Divide the tax-free yield by 1 minus your top tax rate. So if a muni pays 4.3% and your top bracket is 35%, you would earn the equivalent of 6.6% with a muni: 4.3 divided by (1-0.35) equals 6.6.

69 Don't put tax-free bonds into a retirement account. If you do, you turn a tax-free investment into a taxable one because you're taxed (at regular income tax rates) when you withdraw money from a tax-deferred account. This may seem obvious, but it's a common mistake, according to retirement plan experts.

70 Coupon. A bond's coupon or coupon rate is the fixed amount of interest you receive each year.

71 Par value. Also known as face value, it's the amount a bond issuer agrees to pay at maturity. Bonds often trade above or below par.


72 Why mutual funds are great. No other vehicle offers as much diversification and convenience. They also provide a low-cost way for individual investors to gain access to professional management. And with no-load mutual funds, you can make regular deposits or dollar-cost average without additional fees--something you can't typically do with stocks.

73 Hot funds will go cold, but costs are forever. As a mutual fund investor, you pay your share of the fund's costs--management fees and other operating expenses, including the unreported costs of trading. All told, the typical fund's costs probably run between 2% and 2.5% annually, only some of which shows up in the expense ratio. That's why so many funds underperform. Not even Lance Armstrong could zoom ahead with that kind of cement block dragging behind his back tire. You can shed some of that handicap by sticking with index funds and other low-cost choices.

74 How to choose a mutual fund. Picking a fund because it topped the performance charts for a few months or a year is an almost sure way to lose money. Instead, focus on more predictable factors. Among the signs of a quality outfit: a low expense ratio, managers who invest their own money in the funds, and the willingness of the firm to close funds to new investors to keep them from growing too large. And you don't want a fund that has a new manager every few years. Past performance counts, but focus on long-term returns and compare the fund against others that follow a similar strategy.

75 Index funds beat most other funds over time. Don't want to spend a lot of time choosing funds? Stick with index funds, which simply mirror a market benchmark like the S&P 500. What's so great about that? Thanks partly to ultralow costs, over the past five years, Vanguard's 500 Index fund has beaten 33% of domestic-stock funds. Over 10 years, 72%. Over 20 years, 84%.

76-80 Five great places to invest with as little as $500 You don't need a lot of money to get started investing in funds. These no-loads all have low minimum initial investments.

Artisan International $1,000 800-344-1770 Excelsior Value & Restructuring 500 800-446-1012 FAM Value 500 800-932-3271 Gateway 1,000 800-354-6339 Selected American 1,000 800-243-1575

81 Why you pay a sales charge for a mutual fund. If you buy funds using a broker or other professional who gives you advice, you'll pay a sales load; that's how your broker is compensated.

82 How loads work. Mutual funds often have different share classes, each with its own fee structure. The typical load fund structure: When you buy A shares you pay a one-time sales charge, known as a front-end load; B shares have a back-end load--you pay when you sell shares; C shares carry both a front-end and back-end load. A shares tend to have lower annual expenses than B or C shares, and they're usually the best deal.

83 The smart way to use sector funds. If you have a diversified portfolio, you already own plenty of tech, health-care and financial stocks. Buying a sector fund that specializes in these areas can throw your portfolio out of balance. Instead, put a small portion of your equity stake--say, 5% to 10%--into a sector like real estate that doesn't tend to move with the rest of the market.

84 Mutual funds: the next generation. Exchange-traded funds, or ETFs, are baskets of securities that trade on an exchange like a stock. They have lower annual expenses than most mutual funds, and they're more tax efficient. You pay commissions to buy and sell them, though, so they're not suited to dollar-cost averaging. There are dozens of ETFs. Among the most popular: SPDRs (Spiders) track the S&P 500; Diamonds, the Dow; iShares, foreign and domestic indexes and individual sectors; Vipers, Vanguard index funds; and Cubes, the Nasdaq 100 index.

85 Owning 10 mutual funds doesn't mean you're diversified. Diversifying means adding variety. But many funds, especially those that invest in large stocks, have surprisingly similar holdings. Go to morningstar.com and use the X-Ray tool to see if your funds' portfolios overlap.

86 How Morningstar's star system works. The number of stars is based on a fund's long-term performance and how much risk it took. Five stars is the highest rating. Morningstar says that the stars should not be considered a prediction of how the fund will perform in the future.

Three model fund portfolios for typical investors

87 You can cover the markets with as few as two index funds.

CORE STOCK: Vanguard Total Stock Market Index 60% CORE BOND: Vanguard Total Bond Market Index 40%

88 Using actively managed funds, you can fine-tune, adding a small stock fund and an international fund.

CORE STOCK: Clipper 35% SECONDARY STOCK: C & B Mid Cap Value 15% CORE INTERNATIONAL: Causeway Intl. Value 10% CORE BOND: Dodge & Cox Income 40%

89 For further diversification, add a real estate fund and a high-yield bond fund.

CORE STOCK: Oakmark 35% SECONDARY STOCK: Fidelity Small Cap Stock 10% CORE INTERNATIONAL: Julius Bear Intl. Equity 10% SPICAL STOCK: Cohen & Steers Realty 5% CORE BOND: Fremont Bond 30% SPECIAL BOND: Northeast Investors trust 10%


90 What the Federal Reserve does. The Fed seeks to ensure the soundness of the banking system, stable prices and full employment. Among the Fed's most important tools are its power to influence the interest rate on overnight loans between banks and to increase or decrease the nation's money supply.

91 Why what the Fed does matters. The Fed influences the overall direction and level of interest rates. Low or falling rates are bullish for stocks. But if investors think the Fed plans to raise rates, they will often sell stocks because higher rates tend to slow the economy, hurting profits. When the Fed hinted in late January that it might start raising rates sooner rather than later, for instance, stocks recorded their biggest one-day loss in three months. Higher rates also make it more expensive for companies to borrow money to invest in new plants and equipment. And when rates are high, the potential advantage of owning stocks over bonds diminishes.

The four best indicators for tracking the economy

There's no way to foretell the U.S. economy's future with certainty. But by telling us how both consumers and businesses are faring, these four monthly gauges can suggest what might lie ahead. Follow these indicators and you'll be as well informed as many professional investors.

92 The Bureau of Labor Statistics employment report (available at bls.gov/ces), which tracks job creation.

93 The ISM Reports on Business (ism.ws), which take the pulse of the nation's industrial and service sectors by surveying executives in fields ranging from agriculture to retailing.

94 The Conference Board's Consumer Confidence Index (www.conference-board.org), which gives a sense of consumers' willingness to spend and thus spur economic growth.

95 The U.S. Leading Index (also from the Conference Board), a compilation of 10 economic indicators designed to predict how the economy will be behaving three months down the road.


96 What you're paying. One way or another, you have to pay to get financial help. That could take the form of a commission on every stock trade or fund purchase, an hourly fee, a flat fee for a comprehensive financial plan or a wrap fee, which is a percentage of your portfolio (generally 1% to 2% a year). What's key is that you know your total costs up front and believe that you're getting value for that advice.

97 How to check out a pro's background. Registered investment advisers and most financial planners must file a two-part Form ADV with the SEC and state securities regulators, and update it annually. Ask for a copy of both parts. You'll find a description of the adviser's education and employment history, investment practices, fees and disciplinary history. You can check out a broker's disciplinary history at nasd.com or by calling the National Association of Securities Dealers at 800-289-9999. To check on a certified financial planner, call the CFP board at 888-237-6275.

98 How to complain. If your broker or planner works for a firm, first try his supervisor or the company's compliance officer. If you suspect a securities law violation, contact the NASD online at complaint.nasd.com. You can also alert the SEC online at www.sec.gov/complaint.shtml. For a list of state securities regulators, go to nasaa.org. It helps to have written records--including statements, trade confirmations and any correspondence.


99 The most useful websites. The best place to start for news and analysis is our website, money.com. For the rest of your investing needs, you can probably get along fine sticking with a single financial website, and either MSN Money (moneycentral.com) or Yahoo Finance (finance.yahoo.com) will do nicely. Both offer comprehensive one-stop shopping for all manner of financial information, resources and tools: portfolio tracking, quotes, company news, market analysis, charts, stock screens, earnings forecasts, insider sales reports and IPO data.

For fund information, morningstar.com is the unquestioned king, with free data and analysis for thousands of funds. Fund junkies will also want to add fundalarm.com to their bookmarks. The site keeps on top of manager changes and offers insightful and sometimes irreverent commentary.

We like financenter.com for its impressive calculators and tools. A great website to look up unfamiliar investing terms is investorwords.com, a financial glossary with 6,000 definitions, including handy cross-references.

100 The best market commentaries.

-- Warren Buffett In his annual letters to shareholders, you'll find some of the most astute analysis of the markets and investing. You can read Buffett's letters going back to 1977 at berkshirehathaway.com.

-- Jeremy Grantham Another investing legend shares his quarterly market forecasts--including a look back at how his calls panned out--at gmo.com.

-- Tom McManus Research from Banc of America Securities' well-regarded strategist and others can be found at bofasecurities.com.

-- James Paulsen The Wells Capital Management chief investment strategist's monthly Economic & Market Perspective is available at wellscap.com.

-- Bill Gross The bond guru shares his monthly outlook at pimco.com.

-- Other mutual fund managers who post their topnotch shareholder letters online include: Marty Whitman (thirdave.com), Jim Gipson (clipperfund.com) Bob Torray and Doug Eby (torray.com), and the folks at Tweedy Browne (tweedy.com).

101 Six investing classics

The Intelligent Investor by Benjamin Graham The one book you need to learn about stock picking.

A Random Walk Down Wall Street by Burton Malkiel The case for why individuals can do as well as the pros.

Common Sense on Mutual Funds by John Bogle Fund-picking tips from the father of indexing.

Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay A look at how we've long been prone to irrational exuberance.

Devil Take the Hindmost by Edward Chancellor The history of speculation, from ancient Rome to today.

Against the Gods by Peter Bernstein Risk, and how we've tried to manage it over the ages.