Introduction 1 About this Book 1 Foolish Assumptions 2 Icons Used in This Book 2 Beyond the Book 3 Where to Go from Here 3 Part 1: Getting Started Investing Online 5 Chapter 1: Getting Yourself Ready for Online Investing 7 Why Investing Online is Worth Your While 8 Getting Started 9 Measuring How Much You Can Afford to Invest 12 Turning yourself into a big saver 12 Using desktop personal finance software 13 Perusing personal finance websites 15 Capitalizing from personal finance apps 17 Saving with web-based savings calculators 18 Relying on the residual method 19 Using web-based goal-savings calculators 19 Deciding How You Plan to Save 21 To Be a Successful Investor, Start Now! 21 Learning the Lingo 22 Setting Your Expectations 23 Keeping up with the rate of return 23 The power of compounding 24 Determining How Much You Can Expect to Profit 24 Studying the past 25 What the past tells you about the future 28 Gut-Check Time: How Much Risk Can You Take? 30 Passive or Active? Deciding What Kind of Investor You Plan to Be 31 How to know if you''re a passive investor 31 Sites for passive investors to start with 32 How to know whether you''re an active investor 33 Sites for the active investor to start with 34 Chapter 2: Getting Your Device Ready for Online Investing 35 Turning Your Device into a Trading Station 36 Using favorites to put data at your fingertips 37 Putting key mobile apps a touch away 38 Compiling a list of must watch sites 39 Tracking the Market''s Every Move 39 Getting price quotes on markets and stocks 40 Slicing and dicing the markets 41 Your crystal ball: Predicting how the day will begin 43 Getting company descriptions 44 Keeping tabs on commodities 44 Tracking bonds and U.S Treasurys 45 Monitoring Market-Moving News 46 Financial websites 46 Traditional financial news sites 48 Checking In on Wall Street Chatter 50 Everyone is an expert: Checking in with blogs 51 Finding blogs 52 Getting in tune with podcasts 52 Taming Twitter 53 Keeping Tabs on the Regulators 54 Executing Trades 56 Searching the Internet High and Low 56 Keeping the Bad Guys Out: Securing Your PC 57 Mastering the Basics with Online Tutorials and Simulations 58 Online tutorials 59 Simulations 60 Chapter 3: Choosing the Best Account Type for You 63 Knowing How Different Accounts Are Taxed 64 Taxable accounts 64 Retirement accounts 64 Education savings accounts 65 Plain Vanilla: The Taxable Brokerage Account 66 The importance of dividends 67 How capital gains are taxed 69 The high tax price of being short-term 70 How long-term capital gains are taxed 71 When you can win from your losses 71 What to do with your worthless stock 73 Using technology to measure your capital gain 74 Measuring your capital gains if you''ve lost your records 77 How dividends are taxed 79 Retirement Accounts: Knowing Your 401(k)s from Your IRAs 80 401(k)s: A great place to get started 82 Managing your 401(k) plan online 83 Getting in tune with IRAs 84 Setting up an IRA 85 Going Back to School with Education Savings Accounts 86 Three numbers you need to know: 529 87 Getting up to speed on 529 plans online 88 Understanding 529 fees 89 Living in the 529''s shadow: The Coverdell 90 Chapter 4: Connecting with an Online Broker 91 Finding the Best Broker for You 92 The nine main factors to consider 92 Gotchas to watch out for 94 Separating the Types of Brokerages 94 Paying the minimum with a deep discounter 95 Get more with a discounter 97 Full-service traditional 104 Avoiding Hidden Fees 106 Finding Out What Reviewers Think 108 Is Your Money Safe? Checking Out Your Broker 110 Cutting the Cord: Mobile Trading 111 Pay Attention to Where Your Cash is Parked: Money Market Funds 113 Buying Stocks and Mutual Funds without a Broker 114 Stocks: Direct investments 114 Mutual funds: Straight from the mutual fund company 116 Opening and Setting Up Your Account 116 The checklist of what you need to know 117 The checklist of what you need to have 117 Chapter 5: Getting It Done: How to Enter and Execute Trades 119 Understanding How Stock Trades and Shares Are Handled 120 Ways you can hold your investments 120 A second in the life of a trade 126 Getting It Done: Executing Your Trades 127 Types of orders 127 Costs of different orders 129 Tailoring your trades even more 129 Going off the Beaten Path with Different Trading Techniques 130 Cashing in when stocks fall: Selling stock short 130 Tracking the short sellers 131 Living on borrowed time: Buying stock on margin 132 The call you don''t want to get: The margin call 135 The nightshift: Trading in the extended hours 135 Knowing Your Options: Basic Ways to Best Use Options 136 The different types of options 137 Basic options strategies 137 How to get option prices online 140 How to buy options online 141 Discovering more about options online 142 Stepping Through Placing a Trade 143 Using the brokerage''s website 143 Using the brokerage''s mobile app 145 Using the brokerage''s PC software 146 Part 2: Using Online Investment Resources 149 Chapter 6: Why Stock Prices Rise and Fall 151 How Stocks Get into the Public''s Hands 152 Step 1: An idea becomes a company 152 Step 2: The company expands and grows 152 Step 3: The company goes public 154 Step 4: The new shares trade 155 Why Stocks Move Up and Down in the Short Term 155 Tracking the market''s every move 156 Getting in tune with earnings reports 157 Companies and the company they keep in their industries 162 Monitoring the big cheese 165 Where it all begins: Tracking prices of raw materials 165 Getting with the mo'' 166 Mania over merger chatter 167 Why bond yields aren''t boring 168 The heartbeat of the economy: Economic reports 168 What they know that you don''t -- Insider buying and selling 170 Knowing how investors are feeling: Tracking market sentiment 172 What Moves Stocks in the Long Term? 175 Going back to school with academic research 175 Learning from the wise men 176 Chapter 7: Connecting with Other Investors Online 179 Finding Kindred Investment Spirits Online 180 Getting the Message with Stock Message Boards 180 Stock message boards aren''t for everyone 181 Understanding the types of stock message boards 181 Knowing the ulterior motives of some online stock message board members 182 Determining what exchange or market a stock trades on 184 A penny saved: Beware of penny stocks 185 Connecting with an Investment Club 187 How to find an investment club that suits you 188 Understanding the drawbacks of investment clubs 188 Social Networking Comes of Age 189 What''s the fuss about Twitter? 190 Getting a read on the market with Twitter 193 Giving Facebook some face time 194 The Brave New World: Social Networking Meets Online Investing 196 Social investing sites as a higher form of stock message boards? 196 Plugging into social investing sites 197 Starting to get social: Trying social investing sites 198 Chapter 8: Measuring Your Performance 199 The Importance of Tracking Your Performance 200 Why it''s worth the trouble to measure your returns 200 Why you want to measure your risk, too 201 Calculating Your Performance Yourself 202 The easiest way to calculate returns 203 An easy way to calculate returns if you''ve deposited or taken out money 203 The hardest way to calculate returns 205 Calculating How Risky Your Portfolio is 206 A simple way of calculating your average return 207 Calculating your risk 209 What does it all mean? Sizing up your portfolio 210 Finding other things to compare your returns to 211 Using Online Tools to Calculate Your Performance 212 Looking at online performance-measurement tools 213 Using personal finance and performance-tracking software 213 Using stock simulation and social investing sites 214 Using portfolio-tracking websites 215 Using performance-analytics websites 216 Chapter 9: Choosing an Asset Allocation 219 The Recipe for Your Online Investing: Asset Allocation 220 What''s so great about diversification? 221 Zig-zag: The second element of diversification 221 Bigger isn''t always better: Understanding size 223 Picking investments with the right styles 224 How rebalancing steadies your portfolio 226 How discipline can save your portfolio from getting punished 227 Using and Finding Your Perfect Asset Allocation 227 Determining your current asset allocation 228 Using guidelines 230 Picking an asset allocation based on your risk tolerance 232 Picking an asset allocation based on your goals 234 Cha.