Investing is a lot like car ownership.
Many of us buy our first stock and get caught up in the thrill of it, never sitting down to really understand the basics of investing despite its potential to make a huge difference to our returns.
Instead, we learn ad-hoc from friends, forums, or – gulp – bankers, often missing key bits of information.
There are plenty of investing myths our there: Switch to all bonds when you retire; property prices only go up; great companies always make great investments; risk equals reward; gold is the safest asset, etc.
The longer you’ve been investing, the more likely you are to hold at least some outdated beliefs.
As doctors, athletes and other professionals know, continuing education is essential to stay up to date with the latest developments, strategies and new technologies.
I’ve been investing for a couple of decades now, so when I sat down this week to review InvestSmart’s new BootCamp course, I didn’t think I would learn much.
I expected a refresher, and that’s mostly what I got.
But to my surprise, there were plenty of new and useful ideas even for advanced investors.
We don’t always know what we don’t know. The five-module course is designed for beginners and covers the investing basics, such as compound returns, diversification, the difference between active and passive management, and how much money you need to get started.
BootCamp is a good place to begin if you’re new to investing, summarising the essentials in an easy-to-understand format.
If you want to give your grandchildren a head start, it could make a great gift.
Learn at your own pace
For the investing veterans out there, you can skip the beginner modules and head straight to the more advanced topics.
Here, you’ll learn things like how to properly assess your own risk tolerance and different retirement strategies, such as the ‘bucket approach’.
There’s a part on why market timing always fails; what sequencing risk is and how to minimise it; and the only time you should use technical analysis as part of your investment process.
My favourite module – being a psych major – covers 18 cognitive biases that commonly affect investors and simple ways to combat each of them.
Nothing trips up good investors like emotions, so this cheat sheet is worth re-reading before major decisions.
As Charlie Munger said, ‘‘All I want to know is where I am going to die so I don’t go there.’’
There’s a short quiz at the end of each module, too, so if you think of yourself as an investing master, you’ll have the chance to test your knowledge.
All up, you can complete the course in about four to six hours, or you can follow our recommended schedule, which spreads the modules over four weeks.
You don’t have to be Warren Buffett to earn good returns in stocks. But to do well, you will need a deep understanding of the fundamentals.
No matter what your level of experience, a knowledge refresher never goes astray.
At $49.50, BootCamp is an affordable tune-up and better yet, as a member of The New Daily you will receive an extra 10 per cent off.
To enrol or learn more, click here.