All About Stocks

322 Pages·2012·1.42 MB·English

ALL ABOUT
STOCKS
O T H E R T I T L E S I N T H E
“A L L A B O U T. . .” S E R I E S
All About Stocks, 2nd edition
by Esmé Faerber
All About Bonds and Bond Mutual Funds, 2nd edition
by Esmé Faerber
All About Options, 2nd edition
by Thomas McCafferty
All About Futures, 2nd edition
by Russell Wasendorf
All About Real Estate Investing, 2nd edition
by William Benke and Joseph M. Fowler
All About DRIPs and DSPs
by George C. Fisher
All About Mutual Funds, 2nd edition
by Bruce Jacobs
All About Stock Market Strategies
by David Brown and Kassandra Bentley
All About Index Funds
by Richard Ferri
All About Hedge Funds
by Robert Jaeger
All About Technical Analysis
by Constance Brown
All About Exchange-Traded funds
by Archie Richards
All About Retirement Funds
by Ellie Williams and Diane Pearl
All About Dividend Investing
by Don Schreiber, Jr., and Gary E. Stroik
All About Market Timing
by Leslie N. Masonson
All About Asset Allocation
by Richard Ferri
All About Derivatives
by Michael Durbin
All About Six Sigma
by Warren Brussee
ALL ABOUT
STOCKS
The Easy Way to Get Started
ESMÉ FAERBER
THIRD EDITION
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DOI: 10.1036/0071494553
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C O N T E N T S
Preface vii
Acknowledgments ix
Chapter 1 1
Why Invest in Stocks
Chapter 2 12
Common Stocks
Chapter 3 33
Preferred Stocks
Chapter 4 42
Understanding the Risks of Investing in Stocks
Chapter 5 61
Returns of Stocks
Chapter 6 73
Stock Market Indexes
Chapter 7 81
How Stocks Are Traded
Chapter 8 105
How Short Selling Works
Chapter 9 112
Valuing Common Stock
Chapter 10 124
Financial Statement Analysis and Fundamental Analysis
Chapter 11 151
Technical Analysis
v
vi Contents
Chapter 12 179
Theories of the Stock Market
Chapter 13 215
Growth, Value, and Momentum Investing Styles
Chapter 14 238
Open-End Mutual Funds
Chapter 15 262
Closed-End Funds
Chapter 16 272
Exchange-Traded Funds
Chapter 17 278
Investing in Foreign Stocks
Chapter 18 291
Portfolio Management and Evaluation
Index 305
P R E FA C E
T
his third edition to All About Stockshas been rewritten to include
information that will make investors feel more knowledgeable
about their investments in stocks. Investing in stocks is not easy
because the process is filled with questions, recrimination, and
insecurity. Hindsight always provides the clarity as to what stocks
should have been purchased, but looking to the future many
investors are afraid to make investment decisions to take advantage
of opportunities in the market. The aim of this book is to provide a
clear understanding of the characteristics of stocks, their risks and
returns, the workings of the stock market, valuation of stocks, the
use of fundamental and technical analysis in the choice of stocks to
buy and sell, the differences between value, growth, and momen-
tum stocks, and the theories of the stock markets.
Among the many changes to this edition are new chapters on
the valuation of stocks, investing in foreign stocks, and exchange-
traded funds. Each chapter includes many new sections to provide
both beginning and sophisticated investors with the tools and
knowledge to increase their returns without significantly increas-
ing their risks through the building of a diversified portfolio. As
a more informed investor, it will be easier for you to make better
decisions regarding your stock investments.
vii
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