(Part 2) Best products from r/investing

The answer, as usual is: it depends.

If you want to invest your money, then there's no better time than now. However, the implication is that when you invest that money you have to leave it sit long enough to do it's work.

At 19 and wanting to invest, you have time on your side. You need to be able to stomach volatility in the market and not get excited when your stocks rally for 30%, nor should you despair when the stocks plummet by 40%.

Traditionally speaking, the stock market averages between 6%~8% a year, which is much better than any savings account you're going to find. However, you shouldn't treat it as a savings account because volatility will almost certainly put you in a bad position to sell whenever you need the money most.

If you feel like you can stomach that volatility and turn a blind eye to both the rallies and collapses, then the stock market may certainly be for you. If you are NOT looking to place your money in good companies for a long period of time (10+ years), then it's my opinion that you are simply speculating... in which case you may as well go to the casino.

If at this point you have decided that you would like to invest in the stock market, you now need to figure out the degree of involvement you would like to dedicate.

If you're looking for a simple hands off investment, then you should just invest in an index fund such as VFINX, SWPPX, or QQQ.

Index funds closely track the performance of the market and charge minimal fees. They are pretty much totally hands off on your part, and are the Ronco of stock investing. Just set it and forget it, and enjoy your ride on the market.

A step above that are mutual funds. They actively try to beat indexes, but charge a fee to do so. There are mutual funds for any style of investing, and people tend to choose mutual funds that coincide with where they think success will lie. That means choosing foreign or domestic, stocks or bonds, and even individual sectors like technology, retail, energy, etc.

The world of mutual funds is vast, and provide an opportunity to beat the market, but it comes with a price. I'll leave the rest up to you to do your research.

Finally comes individual stock picking. Picking individual stocks is the highest risk, but also have the potential for the highest returns. Also, there are no fees except for the fee for purchasing your shares.

There is also a lot to this world, as I'm sure you know, but if this route interests you, then I would suggest you pick up a few books, beginning with The Intelligent Investor.

This book is, in my opinion, the best introduction out there to investing for long term wealth.

Finally, since you're so young and you seem to have an eye out for your personal finances, I absolutely recommend you read The Millionaire Next Door.

Good luck!

Here is a random article I found about stock simulators.

How do you like to learn things? There are tons of books, podcasts and blogs about investing. Here are some popular ones or ones that I have read and used

• Books
  
  • The intelligent Investor
    
  • A Random Walk Down Wall Street
    
  • Your Money Your Life
    
  • The Richest Man in Babylon
    
  • I Will Teach You to be Rich
    
    
• Blogs
  
  • Stock Series
    
  • Mr Money Mustache
    
  • Mad FIentist
    
  • dozens of others, Google is your friend
    
    
• Podcasts
  
  • Money Tree Podcast -- pretty poor production quality but good general stuff.
    
  • There are tons of others, Google it.
    
    Warren Buffett famously/supposedly read every book in the financial section at the library by age 12--I think the important thing to take from that is you are still young and have tons of free time and aside from starting to invest as soon as you can (you can usually start as soon as you have earned income) you should be investing in yourself...getting good grades, figuring out what you want to do after high school, trying out businesses, learning marketable skills (e.g., coding, good writing skills, good interpersonal skills, good organizational skills, etc).
    
    Good Luck!

I see that Intelligent Investor by Graham has already been posted but that's certainly a good one. However it can be a bit dry for most readers and if you would prefer something a bit fresher I would read Deep Value by Toby Carlisle. He discusses and critiques Graham's teachings along with the strategies of other notable value investors such as Buffet, Icahn, Greenblatt and many others all in a more modern tone. It's been the bible for my own value investing strategies.

Other books to look into are:

• Dhandho Investor by Monish Pabrai (lots of simple strategies and examples for small risk - big payoff investments)
  
• Education of a Value Investor by Guy Spier (good for understanding the discipline and mental state of a good value investor)
  
• Michael Lewis books such as Big Short and Flash Boys (These are less for learning investing and more for generating your own interest in finance with some fantastic writing. It's also good for learning what the reality of the markets and Wall Street are.)

This is actually a harder question to answer than it sounds. The problem is that there are two sets of variables: expected and historical. I'm sure you learned in finance class that an expected variable, ie expected returns is what you would expect after running an infinite number of trials. Even though this is a fixed constant, it is unobservable and we do not know exactly what this number is. We only have the historical returns, which are easily gleaned from past data.


So historically speaking, the literature is pretty clear cut: the average passive investor outperforms that average active investor. However, does this mean that the expected returns of passive investors is greater than active investors? I do not believe this is the case and the historical outperformance may just be because in the data samples used, large percent of market participants are active investors and thus on average, they will underperform due to fierece competition. If we flip the model so that large number of market participants are passive instead, I believe we would see active investors profiting in a greater manner. Hope this helps.

If this is a topic of interest, read Ilmanen's Expected Returns.

No offense taken, although I am not sure communication went across on this one. I don't expect a return on commodities. They're volatile, but 50 years down the road, like most currencies, I'd expect them to retain some value. How much is uncertain, and it's not going to be the part of my portfolio that I expect to grow steadily.

Diversifying with indexes sounds like a good idea to compensate for the fact that I am best suited to evaluate a tech company's capabilities, and not so much other domains.

I'm just disappointed that you would tell me to stop researching and instead leaving me with the simplest of options when I want to put in the effort to learn the underlying concepts and mechanics of the markets and start doing sensible investments. I learnt my current profession by myself, reading books and creating my own projects, and it just happens that I'm now dabbling in finance, and if I happen to start liking it in the end as much as I like it now, it will surely end up more than just a side learning experiment.

If I'm not ready to invest, as you seem to mean, I won't do it right away. But some day, I will do it.\

NB: I'm currently reading this: http://www.amazon.com/Investments-Zvi-Bodie/dp/0073530700/ref=sr_1_1?s=books&ie=UTF8&qid=1398779011&sr=1-1&keywords=investments+9th

Should you know other academical (i.e. not opinion pieces at this time of my learning, cause everyone's got one) books that may help me, I'd be happy to know about them.

Stock and bonds are a good way for the middle class to "keep up" with the wealthy. To catch up, you most likely have to provide a good or service in a new and unique way and build a successful company out of it. The vast majority of millionaires earned a lot of their income from a private business. They some of them invested in securities.

There is a good book on this by Thomas Stanley, a professor that researches wealth, called The Millionaire Next Door. Here is the NYT displaying the first chapter for free. It's a good read, it will tell you a great deal about how people in the United States get and stay wealthy.

Solid list so far. If you're going to the real advanced value stuff, these are what I'd consider absolute, must reads:

• Accounting for Value by Stephen Penman
  
• Financial Statement Analysis and Security Valuation by Stephen Penamn
  
• What Works on Wall Street
  
• Quantitative Value
  
• The Manual of Ideas
  
• The Art of Value Investing
  
• It's Earnings That Count
  
• What's Behind the Numbers?
  
  The second Penman book is an actual textbook, but IMO probably the single best valuation book out there. The first one is a summary-of-sorts of the text, but if you have the time and money, definitely get the text.
  
  And as /u/persistencepays posted, the Greenwald, Dreman, and Montier books are all excellent too.

There are people that dedicate their lives to this question. But it basically boils down to understanding the business, analyzing financial statements, and coming up with projections of future performance. I encourage you to pick yourself up a copy of this book and use it as a reference to pick through the financial statements (10k's,10Q's) of whatever company it is you're trying to value. The bottom line is that if you really want to get an edge it's probably going to take more than just looking at some easily available statistic like PE. On the other hand, most big companies have hordes of analysts following them already whose sole job it is to estimate the value of the company, so the likelihood of you getting an edge for any large company is slim at best. There are probably more opportunities to be had with smaller companies that get less attention.

Investing without prior knowledge of the industry is inherently risky. It is important that you are not placing "bets" on these companies, but rather you are speculating. Speculating requires research and in finance provides a premium for taking on extra risk. Gamblers take on risk without the potential for extra reward. I have a solid (but in no way am I an expert) knowledge of the energy industry, so here are my tips:

1. Avoid oil sands companies (COS, SU) like the plague. There are a large amount of oil sands companies located in Canada, but the production and refining is not profitable in the current market. I believe the break-even point for oil sands is approximately $50 per barrel. West Texas Intermediate (WTI) crude is currently floating around $35, with low expectations for the future. As well as this, producing synthetic crude is notoriously bad for the environment if you are concerned with socially responsible investing.
   
   
2. Invest $1,000 in a combination of PWT, IMO, HSE, CVE, ECA, and CNQ. Do your research and figure out what companies have competitive advantages in their operations and decide why you believe they will be successful in the future. Most of the above are integrated O&G companies, so you will need to understand the upstream, midstream, and downstream segments. I am confident that a majority of O&G companies can be bought for cheap in the current market and will provide growth in the long run.
   
   
3. To hedge the risk from your exposure to solely the oil industry, invest $1,000 in a diversified ETF. See this list for examples. Again, you will have to do your research here to figure out what you want to be exposed to and what kind of returns you want.
   
   I understand that you want to experiment with investing, but this strategy will give you the opportunity to learn about investing while reducing your exposure to industry risk. Your single picks may lose money, but as long as you learn where you went wrong you are provided a net benefit. As short-term to medium-term investing requires finance savvy, I would recommend always holding over a long-term.
   
   Also, if you are interested in learning about the oil industry, I would recommend reading Oil 101, The Prize, and The Frackers.
   
   Good luck!

$245,000 is not that much money but it could be life changing for someone young in that it could allow you to put away a tremendous amount for your retirement when you are young. You don't have enough to do the "wealth management" route but you do have enough for it to make a huge difference. You can't really escape knowing about money now that you have some. https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio-ebook/dp/B0041842TW is terrific first book.

Put it in a money market. Commit to it coming out of the money market within 90 days but not before 30 days. If you don't want to learn: Scwab's robo and Wealthfront's robo are excellent places to just put it now and forget about it. You sound young and if you are get an 80/20 portfolio.

Otherwise read that book and decide what you want to do.

Do you have access to free printing by any chance? perhaps you can get an electronic copy and just print it?

I'm guessing that you're young, based on your talk about allowance. I don't recommend Intelligent Investor, as there might be some prerequisites that you are missing. The book is pretty accounting heavy terms, and you should have at least a basic knowledge of corporate accounting before reading it. Save this one for when you can look at all 3 financial statements and know what ever item on those statements mean.

You might this one to be more of an easier read: "The Little Book That Beats The Market". This one tries to get you to think about companies as businesses instead of tickers with a fluctuating price. You won't need any knowledge of corporate accounting for this one.
http://www.amazon.com/gp/offer-listing/0470624159/ref=sr_1_1_olp?ie=UTF8&qid=1394658640&sr=8-1&keywords=the+little+book+that+beats+the+market&condition=used

If you want to learn some corporate accounting, I recommend this one as it an easy read and catered to beginners. Also, it's $4 on Amazon so your allowance can go a long way.
http://www.amazon.com/gp/offer-listing/1416573186/ref=sr_1_2_olp?ie=UTF8&qid=1394658943&sr=8-2&keywords=interpretation+of+financial+statements&condition=used

I don't recommend Random Walk On Wall Street for your level. EMF is basically something that says the average investor cannot do better than the average investor (duh), in the grand scheme.

I'm not sure how /r/investing feels about this particular book, but being that I was new to how the more complex aspects of managing your money work, it helped me get an idea of what what trajectory I should follow and the steps to take.

I Will Teach You To Be Rich by Ramit Sethi was an easy, funny, and overall great read. It's aimed at people who know very little about managing their finances and/or investing.

If you want to get an idea for the format of the book, he does a lot of videos online about the same content in the book. You can find them here. They're all very easy to consume and understand and the book follows this same format for the most part.

I agree you should diversify into foreign ETFs. I think you should also consider other asset classes (commodities and real estate). I wouldn't worry about dividend yield either with your timetable, you want price appreciation more than dividends (plus dividend stocks are overvalued now since people have been piling into those in lieu of bonds). I'd keep VTI or SPY for your US holdings.

Some ETFs for other asset classes (not necessarily these in particular, may be substitutes with better fees, etc.):

GCC for commodity exposure

VEU for broad global equity exposure

RWO - broad diversified global real estate (both US and international)

I wouldn't touch bonds now for anything (way overpriced), but on your 15 yr+ timetable you probably wouldn't want to weight them too heavily anyway.

For your extra ETF I'd vote for ARGT (Argentina) - they're just starting a new bull market.

This is a good read for building a relatively low-maintenance portfolio: http://www.amazon.com/The-Ivy-Portfolio-Endowments-Markets/dp/1118008855

Do your own due diligence of course too. I'm just some guy on reddit. Good luck!

Some people really struggle with seeing loses in their portfolio. You should consider that maybe stocks are not a suitable investment vehicle for you if you are afraid you won't have the discipline to hold when the markets are down.

One thing that helps, is to realize that bear markets are normal and expected. If you have a long term strategy then it is nothing to fear, in fact, bear markets represent good buying opportunities to the long term investor.

I highly recommend this book - Stocks for the Long Run by Jeremy Siegel (You can probably find the pdf by googling it).

https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514

The book does a through analysis of historical stock returns and convincingly argues that holding a diversified portfolio of stocks for a long period of time is a very efficient way to invest. Even if you only read the first chapter, it may increase your confidence and help you create your own strategy.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits) - Jack Bogle - Vanguard Founder. No gimmicks. Simple, low-cost, and passive indexing for buy and hold investors.

One Up On Wall Street: How To Use What You Already Know To Make Money In The Market Peter Lynch was a fund manager of one of the most successful actively managed funds. Active investing. Buy companies that are really successful at getting you to buy their product. Observe the world around you type of investing.

As mentioned in this book:
http://www.amazon.com/Warren-Buffett-Interpretation-Financial-Statements/dp/1416573186/ref=sr_1_16?s=books&ie=UTF8&qid=1410454357&sr=1-16&keywords=investing+warren+buffett

These are some of the key indicators to look at.(You could obviously look at more) I look at these also and it really helps to paint a true picture of a company WHEN you use them and compare these to the same indicators of a competing company in the same space.(i.e Coca Cola vs Pepsi)

Income Statement

• 1. Gross Profit Margin
     
• 2. Operating Profit Margin
     
• 3. Net Profit Margin
     
• 4. Return On Equity
     
• 5. Retained Earnings
     
• 6. Diluted Earnings Per Share
     
• 7. P/E
     
     Balance Sheet Analysis
     
     
• 1. Cash & Short Term Investments
     
• 2. Long Term Debt
     
• 3. Current Liabilities
     
• 4. Working Capital
     
• 5. Working Capital Per Share
     
• 6. Current Ratio
     
• 7. Debt to Equity Ratio
     
• 8. Cash - Current Liabilities(do they have enough Cash to cover their current liabilities. A good company usually does)
     
     You also would want to look and see if they provide a dividend and have a history of increasing their dividends.
     
     When you compare these numbers from one company vs another - over say a 5-10 yr period - it really gives you a good analysis and the ability to see which company is doing better than the other.
     

IMO you need an understanding of personal finance (taxes, emergency savings, mortgages, insurance, prudence etc) then an understanding of investing. Just pick an accepted guru and read one of their books on personal finance. They are all targeted at "sub middle America" and you'll get it quick. After that you just need to decide how much you care about investing, and immediately forget what the personal finance guru told you about investing, they all believe in 1 size fits all portfolios. If you want to pick your own stocks and funds, you need to understand accounting, economics, and corporate finance and then decide which investment philosophies you find to be true. If you want to have someone else invest for you, read Jack Bogle's The Clash of Cultures. It shows why he recommends index funds, but he's far more open than anyone on this sub about the potential societal impacts of huge chunks of cash on auto-pilot. It will also help you decide among active mutual funds.

​

If all of this is making your head spin, just read The Clash of Cultures and talk to financial advisors until you get one that is patient and not full of shit. One way of profiling: weed out fat ones unless you know they manage huge amounts of money. It weeds out extremely undisciplined people.

Props for mentioning the Permanent Portfolio, but a) where's the cash?, and b) not enough gold.

There are a lot of very smart investors out there who think that gold still has a long way to go. I can wholeheartedly recommend the Permanent Portfolio to anyone and present it as a very stable portfolio, but on some level I expect the 25% gold to make the difference between rags and riches.

Thanks for sharing. I hope this gets more up votes!

However, one thing I will say is that it would be interesting if this data took into consideration how many years into the bull market the market was. Cuz think about it. it makes sense that ~66% of the time you are better off investing all your money because the market's general trend is upwards. However, the longer into a bull market one gets (tautologically) the closer you are to a bear market. So, to me, it would be interesting to see a chart showing how the percentage changes every additional year into a bull market... unless I am think about this wrong.

In Jeremy Siegel's most recent addition of Stocks for the Long Run he explains that there has never been a time when an investor in the US market didn't make money on an investment left for over a decade.

Does your or your husband's work offer a 401k plan or similar with matching? Matching means when you put money in, your company puts money in too. That's as close to free money as you can get, so take advantage of that if you haven't already. Within a 401k you can choose to invest in stocks or bonds.

Next recommendation after that would be to open a Roth IRA and do your investing within that account. Why? Because you won't be taxed on gains or dividends - it all grows tax free. To be clear: A "Roth IRA" is just a type of account where you choose to buy/sell stocks and bonds.



> I know nothing about investing, stocks, trading. ... Would I be a good candidate for experimenting with day trading?

One specific podcast episode would be very helpful for you, from Freakonomics: The Stupidest Thing You Can Do With Your Money. Or a book about the same thing, The Bogleheads' Guide to the Three-Fund Portfolio: How a Simple Portfolio of Three Total Market Index Funds Outperforms Most Investors with Less Risk

Firstly, you are right to be paranoid. DO NOT enlist the services of a financial advisor. Their performance almost never justifies their fees in the long run. Also beware of high expense ratio mutual funds. Below are two good options. One requires some study (but perhaps less than you may fear). The second is very easy and hands-off.

Option 1: Sit in cash and learn about investing, then invest intelligently. *see details below

Option 2: If you don't want to take a bit of time to learn how to invest, open a brokerage account (Fidelity and Vanguard are both good). Put 80% of the money in a low expense-ratio S&P ETF (such as IVV or SPY) and 20% in a low expense-ratio short-term bond ETF (BSV). The S&P ETF will simply perform as the overall US economy does over the long term. The bond ETF acts as a sort of 'ballast' for the equities (S&P / stock market) portion of your investment. As opposed to long-term bond funds/ETFs, short-term bonds are less interest-rate sensitive. This will do better than most mutual funds long term. https://www.youtube.com/watch?v=mOS4wAsBnvM

With either option, you should be contributing to an IRA to the maximum allowed amount every year. Whether you use the money yourself or give it away, you will pay less taxes.

*Resources for learning to invest wisely (the much better option!):

https://www.ruleoneinvesting.com/podcast/

https://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/1611637589/ref=pd_sim_14_4?_encoding=UTF8&pd_rd_i=1611637589&pd_rd_r=49H5XWEBE322MGN21T9A&pd_rd_w=4BiWA&pd_rd_wg=h8HSo&psc=1&refRID=49H5XWEBE322MGN21T9A

https://www.amazon.com/Dhandho-Investor-Low-Risk-Method-Returns/dp/047004389X/ref=sr_1_1?ie=UTF8&qid=1524885124&sr=8-1&keywords=the+dhandho+investor

https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Essentials/dp/0060555661/ref=sr_1_1?ie=UTF8&qid=1524885145&sr=8-1&keywords=the+intelligent+investor+by+benjamin+graham

• A John Bogle Indexing Book or any book that covers indexing and why its more prudent than active management. I know this isn't what you asked, but the rest of the points on my list will fall apart without a solid foundation.
  
  
• Index Fund Advisors website For an introduction to both indexing and academic investment factors. An absolute ton of videos and articles, and even a Risk Capacity survey (if you fill out the survey, they will email you about wealth management, but there is a ton of free information on the site).
  
  
• Paul Merriman's website for factor based investment strategies and portfolios. He also has a weekly podcast.
  
  
• Larry Swedroe's website and his books for more factor-based investment advice. My favorite book is this one
  
  
• Vanguard video webcasts for coverage on a myriad of investing, economic, and financial planning topics, with CFAs, CFPs, and other professionals.

If you're looking for somewhat of a comprehensive textbook, this has quite a bit of information you may be looking for. http://www.amazon.com/gp/aw/d/0073530700/ref=mp_s_a_1_1?qid=1415848966&sr=8-1&pi=SY200_QL40

As other users suggested, you may want to look into basic accounting / financial reporting as well. It puts some of the ratios into perspective and it's pretty essential for someone interested in finance. If you can get your hands on some CFA material, that could help as well.

Forget Shkreli. The usual sources (besides in-house proprietary models) are:

(1) Macabacus. (see http://macabacus.com/learn).

(2) Rosenbaum and Pearl, Investment Banking - book and excel models

A bit more academic, but more in-depth:

(3) Penman's Financial Statement Analysis and Security Valuation (excellent book and he has a running example that guides you to create your own valuation spreadsheet)

(4) Dan Gode and Jim Ohlson models These guys are genuine experts from the academic side.

(5) Damodaran, as others have mentioned.

(6) McKinsey, Valuation. Some people like this one.

(7) Fernandez, Company Valuation Methods and Common Errors. Something of an acquired taste, but might be worth the read since he provides a list of the most common valuation errors. Gives analysts an awareness of how they can f**k up which can be useful.

hey I read that! Matt Simmons ended up being dead wrong about peak oil, but otherwise I enjoyed the book. But The Prize by Daniel Yergin is the king of oil books - it is brilliant.

http://www.amazon.com/The-Prize-Quest-Money-Power/dp/1439110123/ref=pd_bxgy_14_img_2?ie=UTF8&refRID=04AERX02B4996WQXBJA0****

You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits By Joel Greenblatt There are a lot of great suggestions on this board. This book gives a lot of great common sense advice for special situations investing. Also, The Ivy Portfolio by Mebane Faber is a good read.

Have you ever read Penman's Financial Statement Analysis and Security Valuation? He advocates for reformulating the balance sheet into operating and financial components, so that one can get a better sense of the company's operations. The traditional presentation of the balance sheet obfuscates this, but I think it's a really good way to uncover just how well (or poorly), a company is being run.

When you separate Apple's operating and financial components this way, the company actually has negative net operating assets; effectively, Apples runs a float that shareholders can invest elsewhere at whatever WACC they think they want.

Anyway, I have no dog in this fight, but Apple's operational might is formidable, and the massive returns they can earn on very little investment is kind of nuts.

My main point is that Penman is cool if you haven't checked him out.

Yes, there are unique risks to gold like there are to any asset class, and for bullion in particular it is physical theft. If you own property, having it secretly placed in a fireproof safe somewhere within your house is one way, as is storing another portion of it in a safety deposit box or two. If you have significant holdings, you can also investigate allocated storage( https://www.bullionvault.com/gold-guide/allocated-gold ), either domestic or overseas. There is also the possibility of insuring it directly, but maybe an umbrella policy could cover it. One of the anxieties of this holding is minimizing overhead.

This book has good info: https://www.amazon.com/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254/

As does this forum (early topics in particular): https://www.gyroscopicinvesting.com/forum/index.php

I like "The Permanent Portfolio: Harry Browne's Long-Term Investment Strategy" by Rowland & Lawson. This is a defensive strategy. Couple of good points: first of all it's light reading (for me anyway). Couple of hundred pages in a fairly big font. It's also pretty practical and supported by a forum with nice people. Furthermore it's a comprehensive strategy which includes the building as well as drawdown phase.

What I don't like is that the authors no longer participate in the forum, and that the strategy involves bonds. Which is great but with the crazy EU bonds situation, it's not easy to set up a European permanent portfolio.

All things considered still definitely a plus though.

https://www.amazon.com/Permanent-Portfolio-Long-Term-Investment-Strategy/dp/1118288254

I read the following, in roughly this order:

• A whole lot of Investing for Beginners, lots of bite-sized articles that explain a huge breadth of topics in very approachable but detailed terms for beginners.
  
• The Intelligent Investor (the latest revision, annotated by Jason Zweig, who did an incredible job bringing each chapter into the modern day)
  
• Watch Prof. Aswath Damodaran's Corporate Finance lectures
  
• Watch Prof. Aswath Damodaran's Valuation lectures
  
• The Millionaire Next Door, by Drs. Thomas Stanley and William Danko
  
• The Most Important Thing Illuminated, by Howard Marks
  
• The Berkshire Hathaway Letters to Shareholders

There's lots of useful information at The Boglehead's Website, especially The Getting Started Guide.

I've also found the following books incredibly helpful as well:

1. The Four Pillars of Investing
   
   
2. The Boglehead's Guide to Investing
   

Much of the below text is based on personal opinion and reading many articles and books such as "Ivy League Portfolio" (http://www.amazon.com/The-Ivy-Portfolio-Endowments-Markets/dp/1118008855). I lack sources for majority of the comments below, so feel free to call my bluff just know that I know I have read everything below in multiple locations.

Stocks are more risky than bonds over a short duration, however they have a higher expected return over a long duration. A "balanced" portfolio will include both stocks and bonds to be able to both decrease volatility (ups and downs) but also so that you can rebalance between the 2 and sell stocks to buy bonds when stocks are high and bonds are low or the opposite.

Within stocks there are different things you can hold. One example if REIT, another (this is maybe not actually within stocks but it is not within bonds) is commodities. Or, you can focus on the size, small cap versus large cap. So you can hold all of the equity or you can hold (domestic: small cap, large cap, REIT, commodity, bonds), (international: small cap, large cap, REIT, bonds). You can also add in actively managed mutual funds as those also can act as diversification.

Now, most people will simply suggest a 3-fund portfolio (domestic equity, domestic bonds, international stock). Some research such as displayed within "Ivy League Portfolio" suggests a 5-fund portfolio (domestic equity, domestic REIT, domestic bonds, commodities, international stocks) and holding those 5 gives better volatility control as well as better gains from re-balancing. Other people are quite lazy and simply invest 100% U.S.A. equity such as S&P 500 index. To make matters worse, there have been studies which suggest that re-balancing actually provides no benefits other than decreased volatility.

So, let me try a different track. https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations According to Vanguard, historically speaking, having the ability to re-balance between stocks and bonds has provided worse return than 100% stock. The only historic benefit of being able to re-balance between domestic stock and domestic bonds is significantly reduced volatility. Now, you are asking whether or not you should add more complexity to your portfolio. More complexity means that you need to pay slightly more attention to your asset allocations, more work involved with re-balancing, if this is a taxable account more paperwork due to dividends even without re-balancing, and potentially slightly worse return. Worse return specifically is due to historically speaking real estate has had slightly lower return than the U.S. stock market as a whole.

If you are most concerned with trying to decrease volatility and the actual return is secondary then fine, add a REIT fund. If you are more concerned about long-term growth and prefer to be more hands-off and passive then just go with the U.S. equity fund.

I liked that book, but it is somekind similar to TII. What I remembred about that book is that a stock tend to be undervalued if the bonds pays the same rate, since the stock tend to have fewer investors who would invest assuming risk, they will prefer the bonds, but they overlook the stock potential growth. Off course, this is waaay oversimplified. And our market have P/E throught the roof now. Too much volability and speculation IMO.

I'm keeping my IPCA+ till the end of election and wait to make some good investment then. Maybe I'll hold some WEG stocks, since they are pioneering bus electrification in the country, they may get a spurge in the near future.

edit:grammar

Meus dois centavos,
Sucesso pra ti!

This was a pretty good book on the subject. Similar conclusion to OPs.

https://www.amazon.com/Ivy-Portfolio-Invest-Endowments-Markets/dp/1118008855

Vanguard might honestly be a better place to start unless you also want a range of other products like a checking account (with checks and bill paying), CDs (certificates of deposit, a type of savings account), currency trading, etc. Schwab is probably a better "full service" bank/brokerage, though.

If you don't have a lot of money to start with, and this is for long-term investing, I recommend starting with 1-3 conservative mutual funds or ETFs, and resist the temptation to try to do individaul stocks. The "three fund portfolio" is a very solid technique. This book is a great introduction to sensible investing, which explains why this is a good strategy.

Basically, index funds and ETFs let you hedge your stock market bets by pooling your money in a big basket of stocks. The S&P 500 (e.g. VOO or SPY ETFs) are up more than 22% this year. That's hard to beat for individual stocks. It's possible to get lucky, but over time, you're likely to do worse than the stock market.

I would definitely read Howard Marks.

Might be easiest in book form. Amazon.

I think this book would be invaluable

https://www.amazon.com/Will-Teach-You-Be-Rich/dp/0761147489/ref=sr_1_1?s=books&ie=UTF8&qid=1485217701&sr=1-1&keywords=i+will+teach+you+to+be+rich

And the guys web site

http://www.iwillteachyoutoberich.com

And this

https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds

And this

https://www.khanacademy.org/economics-finance-domain/core-finance

If you master this information at your age you will have compiled the basics that many people twice your age have no working knowledge of. I buy a copy of I will teach you to be rich for every 18 year old kid any of my friends have.

I just started reading A Random Walk Down Wall Street by Burton Malkel (latest edition is 2019), and it's pretty good so far. I've also seen several recommendations for John Bogle's The Little Book of Common Sense Investing, though I haven't read it yet.

There are also free courses on Coursera to get your feet wet (e.g. Robert Shiller's Financial Markets class, Yale Unv). These aren't always designed for your everyday retirement investor, but Shiller's course is still really informative.

My recommended reading list includes One Up on Wall Street, Fail-Safe Investing, The Black Swan, How an Economy Grows and Why It Crashes, and Extraordinary Popular Delusions and The Madness of Crowds. The first book talks about picking individual stocks based on what you already know, the second about structuring a portfolio for growth while still playing defense, the third about common fallacies and hubris, the fourth about basic economics, and the fifth about irrational behavior.

If your money is sitting in a US bank account, then you're making a 100% bet on the future of the US dollar. At a minimum, diversify your currency holdings by buying sovereign and high-grade corporate debt in countries with strong currencies.

Assuming you're newer to the topic--or else why else would you be asking for books to understand it--I would start with one of "The Little Book of..."

I recommend for value investing types: https://www.amazon.com/dp/0470624159/ref=cm_sw_r_cp_apa_ZmsUBbTG4X8NJ

And index investing types: https://www.amazon.com/dp/1119404509/ref=cm_sw_r_cp_apa_1psUBbBD9SS81

Learning to fill in one of these spreadsheets is pretty meaningless. There are so many adjustments to make in a DCF depending on each company and/or industry you should try to start from the bottom up. If you're a beginner and really want to learn how to do a full DCF I'd recommend getting one of the below books to start learning from scratch.

http://www.amazon.co.uk/Valuation-Measuring-Managing-Companies-Finance/dp/0470424656

or

http://www.amazon.co.uk/Investment-Valuation-Techniques-Determining-Finance/dp/1118130731

The first place to start is with The Prize (https://www.amazon.com/Prize-Epic-Quest-Money-Power/dp/1439110123) to get a sense of historical context.

Get a good handle on intro finance (seriously, buy a textbook and memorize it). Try to find an intermediate book and absorb that. Then read the following:

Expected Returns

https://www.amazon.com/gp/aw/d/0078025311/ref=mp_s_a_1_2?ie=UTF8&qid=1481139916&sr=8-2&pi=SY200_QL40&keywords=Stephen+penman&dpPl=1&dpID=51qgSXra6oL&ref=plSrch



Good reading.

For $50 and a couple of dozen hours spent reading, you'll get an entire MBA's valuation education by reading Valuation: Measuring and Managing the Value of Companies from McKinsey.

The little book of common sense investing by John C. Bogle

The Bogleheads' Guide to Investing

The Bogleheads' Guide to the Three-Fund Portfolio

What's the effect of holding period on returns, I wonder?

This is a complex subject. Here are a couple of books, though you might not need the 2nd one (I'm not sure what's involved in an education in Economics).

Valuation

How to Read a Financial Report

PDF Warning - The Investment Checklist