Investing 101

Lesson 4: Practical Guide for Investors

Building Your Foundation

Your first step in building your investment portfolio is to assess what you have. This does not mean only looking at your stocks and mutual funds, but all the assets you hold including real estate, collectibles, artwork, and your own worth and earning power. In chapter 12, the textbook lays out a series of ten exercises to begin your practical assessment. The author starts with the understanding that you have the proper insurance in place to protect your assets.

He then talks about developing your investment objectives; reviewing ways to avoid taxes; exploring alternatives for your cash reserves; investigating bonds; buying a house; discussing investment alternatives including: commercial real estate, gold, and collectibles; understanding the costs of your investing; and finally reviewing how to diversify your investment steps. Be certain to work carefully through these steps.

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