BootCamp: an online course to hone your investing skills
A friend bought a new Tesla recently and took me for a spin. As I buckled my seat belt, he fiddled with the touchscreen, changed a few settings and turned on a hidden performance feature called 'Ludicrous Mode.'
If you own a Tesla, you may know what happens next. Ludicrous Mode unlocks an extra 35 horsepower. When he pressed the accelerator, the car took off. We must have hit warp-speed; I was on the edge of passing out.
Understand the fundamentals of investing
Five-module course over four weeks
Great for beginners or as a tune-up for experienced investors
The lesson isn't that you should rush to the nearest Tesla and unlock this 'easter egg' - it's that if you want to know what something is truly capable of, it pays to read the manual.
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 out-dated 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. You gather points along the way for things like test scores, participation in discussions, and completing study units. I scored 2,414 points – can you top my score? (One clever member already has – well done B. Loh. The score to beat is 3034).
All up, you can complete the course in around 4–6 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, BootCamp is an affordable tune-up.
To enrol or learn more, click here.
Module 1 – Investment Planning
Investment Planning Overview
How much to invest?
The Power of Compound Returns
Module 2 – Investment Diversification
What are asset classes
Different blends of asset classes
Alignment with investment time frame
Rebalancing Your Portfolio
Module 3 – Different Investment Vehicles
Investment Vehicles Overview
Cash & Bonds
Module 4 – Investment Strategies
Investment Strategies Overview
Active vs Passive
Core & Satellite
Income Based Strategies
Module 5 – Investor Psychology
Investor Psychology Overview
What holds you back
What tempts you to invest
Biases and their Solutions