Investing 101

January 3, 2000
The "Your Money" syndicated columnist for the Los Angeles Times, Kristof has written a primer for novice investors, but despite her accessible prose she misses the mark here. Her opening chapter, "Exorcising Your Demons," examines the various psychological reasons people make dumb investing decisions: for example, the "money-lover" agonizes over every penny spent and is always working for more, while the "ostrich" refuses to alter an investment strategy until it's too late. Other chapters--"Risk and Reward," "Investing in Bonds" and "Mutual Funds"--cull standard advice found in countless books, Web sites and magazines. Yet her presentation of the material is too abbreviated, which may mislead beginners. For example, Kristof describes mutual fund prospectuses as "long, boring legal documents that spell out all the details about investing in a particular fund. Like most long, boring documents, they contain a handful of fascinating tidbits of information that can tell you whether the investment you're looking at is likely to be a boon or bust before you put your money at risk." Then, albeit briefly, she discusses the significant data found in a prospectus. However, after reading about something that is "long and boring," readers may well skip the useful information that follows. There's a chapter on socially responsible investing--it's an important topic, but not for readers new to the game. Kristof's writing style is friendly, but readers may be shortchanged by her breezy approach.