My First Investing/Trading Books

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When I was learning about investing in the stock market, I needed books for more information. There are a lot of free pdf on the web but the books that I like, I want to have a hard copy of it so that my children maybe can read it someday. Maybe that will be the legacy that I'll be leaving them. I want them to know money management as it is very important. If only I have known that when we were kids, maybe I have chosen a different path. So, I went to check the bookstore and EXPENSIVE!! I searched for online bookstores that offers affordable books like amazon and I found at about BOOK DEPOSITORY. These are my first books. Jesse Livermore's Methods of Trading in Stocks - Richard Wyckoff This was my first ever book about trading. It has only 32 pages and can be read in one sitting but full of information. It tells about how Livermore's preparation before and after trading, money management, news, stocks to trade and pyramiding.   How To Trade in Stocks - Jesse Li

Term of the Day: Rule of 72

The rule of 72 is a shortcut to estimate the number of years required to double your money at a given annual rate of return. The rule states that you divide the rate, expressed as percentage, into 72:
 
Years required to double your money = 72/compound annual interest rate
 
Example: 72/8 (8% annual interest rate) = 9 years to double your money
 
The rule can also be used to find the amount of time it takes for money's value to halve due to inflation. If inflation is 6%, then a given amount of money will be worth half as much in 72/6 = 12 years.
 
Adjusting For Higher Rates
The rule of 72 is reasonably accurate for interest rates between 6%-10%. When dealing with outside the range, the rule can be adjusted by adding or subtracting 1 from 72 for every 3 points the interest rate diverges from 8%. Example: 11%, 73; 14%, 74; 5%, 71.
 
Adjusting For Continuous Compounding
For daily or continuous compounding, using 69.3 gives a more accurate result. Some people adjust it to 69 or 70 for simplicity.
 
Example:
 


Source: Investopedia


 

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