Stock investing for dummies

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Title Page Copyright Page Table of Contents Introduction About This Book Foolish Assumptions Icons Used in This Book Beyond the Book Where to Go from Here Part 1 The Essentials of Stock Investing Chapter 1 Surveying the World of Stock Investing Understanding the Basics Preparing to Buy Stocks Knowing How to Pick Winners Recognizing stock value Understanding how market capitalization affects stock value Sharpening your investment skills Chapter 2 Taking Stock of Your Current Financial Situation and Goals Establishing a Starting Point by Preparing a Balance Sheet Step 1: Make sure you have an emergency fund Step 2: List your assets in descending order of liquidity Step 3: List your liabilities Step 4: Calculate your net worth Step 5: Analyze your balance sheet Funding Your Stock Program Step 1: Tally up your income Step 2: Add up your outgo Step 3: Create a cash flow statement Step 4: Analyze your cash flow Another option: Finding investment money in tax savings Setting Your Sights on Your Financial Goals Chapter 3 Defining Common Approaches to Stock Investing Matching Stocks and Strategies with Your Goals Investing for the Future Focusing on the short term Considering intermediate-term goals Preparing for the long term Investing for a Purpose Making loads of money quickly: Growth investing Steadily making money: Income investing Investing for Your Personal Style Conservative investing Aggressive investing Chapter 4 Recognizing Risk and Volatility Exploring Different Kinds of Risk Financial risk Interest rate risk Market risk Inflation risk Tax risk Political and governmental risk Personal risk Emotional risk Getting the Scoop on Volatility Minimizing Your Risk Gaining knowledge Staying out until you get a little practice Putting your financial house in order Diversifying your investments Weighing Risk against Return Chapter 5 Stock Investing through Exchange-Traded Funds Comparing Exchange-Traded Funds and Mutual Funds The differences The similarities Choosing an Exchange-Traded Fund Bullish ETFs Bearish ETFs Taking Note of Indexes Part 2 Before You Start Buying Chapter 6 Gathering Information Looking to Stock Exchanges for Answers Grasping the Basics of Accounting and Economics Accounting for taste and a whole lot more Understanding how economics affects stocks Staying on Top of Financial News Figuring out what a company’s up to Discovering what’s new with an industry Knowing what’s happening with the economy Seeing what politicians and government bureaucrats are doing Checking for trends in society, culture, and entertainment Reading (And Understanding) Stock Tables 52-week high 52-week low Name and symbol Dividend Volume Yield P/E Day last Net change Using News about Dividends Looking at important dates Understanding why certain dates matter Evaluating Investment Tips Chapter 7 Going for Brokers Defining the Broker’s Role Distinguishing between Full-Service and Discount Brokers At your disposal: Full-service brokers Just the basics: Discount brokers Choosing a Broker Discovering Various Types of Brokerage Accounts Cash accounts Margin accounts Options accounts Judging Brokers’ Recommendations Understanding basic recommendations Asking a few important questions Chapter 8 Investing for Long-Term Growth Becoming a Value-Oriented Growth Investor Choosing Growth Stocks with a Few Handy Tips Looking for leaders in megatrends Comparing a company’s growth to an industry’s growth Considering a company with a strong niche Checking out a company’s fundamentals Evaluating a company’s management Noticing who’s buying and/or recommending a company’s stock Making sure a company continues to do well Heeding investing lessons from history Chapter 9 Investing for Income and Cash Flow Understanding the Basics of Income Stocks Getting a grip on dividends and dividend rates Recognizing who’s well-suited for income stocks Assessing the advantages of income stocks Heeding the disadvantages of income stocks Analyzing Income Stocks Pinpointing your needs first Checking out yield Looking at a stock’s payout ratio Studying a company’s bond rating Diversifying your stocks Exploring Some Typical Income Stocks It’s electric! Utilities An interesting mix: Real estate investment trusts (REITs) Business development companies (BDCs) Covered Call Writing for Income Writing Puts for Income Chapter 10 Understanding Technical Analysis for Stock Investors Comparing Technical Analysis and Fundamental Analysis Looking under the hood of technical analysis Examining the good and bad of technical analysis Combining the best of both worlds Using the technician’s tools Staying on Top of Trends Distinguishing different trends Looking at a trend’s length Using trendlines Watching the channel for resistance and support Getting the Scoop on Technical Charts Checking out types of charts Picking out chart patterns Surveying the Relative Strength Index Part 3 Picking Winners Chapter 11 Using Basic Accounting to Choose Winning Stocks Recognizing Value When You See It Understanding different types of value Putting the pieces together Accounting for Value Breaking down the balance sheet Looking at the income statement Tooling around with ratios Chapter 12 Decoding Company Documents A Message from the Bigwigs: Reading the Annual Report Analyzing the annual report’s anatomy Going through the proxy materials Dig Deeper: Getting a Second Opinion Company documents filed with the SEC Value Line Standard & Poor’s Moody’s Investment Service Brokerage reports: The good, the bad, and the ugly Do It Yourself: Compiling Your Own Research Department Chapter 13 Emerging Sector and Industry Opportunities Telling the Difference between a Sector and an Industry Interrogating the Sectors and Industries Which category does the industry fall into? Is the sector growing? Will demand for the sector’s products and/or services see long-term growth? What does the industry’s growth rely on? Does the industry depend on another industry? Who are the leading companies in the industry? Is the industry a target of government action? Outlining Key Sectors and Industries Robotics and artificial intelligence Ecommerce Marijuana investing Commodities Precious metals Cryptocurrency opportunities Driving it home Chapter 14 Small Cap Stocks, IPOs, and Motif Investing Exploring Small Caps Checking that a small cap stock is making money Analyzing small cap stocks before you invest Picking out principles for small cap success Finding small cap gems Investigating IPOs Getting the Scoop on Motif Investing Discovering what you get with motifs Focusing on motif features Considering motif categories Understanding the risks Chapter 15 The Big Economic and Political Picture Tying Together Politics and Stocks Seeing the general effects of politics on stock investing Ascertaining the political climate Distinguishing between nonsystemic and systemic effects Understanding price controls Looking at the role of central banks Poking into Political Resources Government and other reports to watch out for Websites to surf Part 4 Investment Strategies and Tactics Chapter 16 Discovering Screening Tools Understanding the Basics of Screening Tools Choosing the category Distinguishing “min” versus “max” Setting value ranges Searching regardless of your entry Touring a Stock Screening Tool Before you begin: Selecting your screener First up: The major categories The main event: Specific filters Checking Out an ETF Screening Tool Asset class Attributes Issuer Structure Expenses and dividends Liquidity and inception Returns ESG scores Fund flows Risk Holdings Themes A Few Final Points to Keep in Mind Chapter 17 Understanding Brokerage Orders and Trading Techniques Checking Out Brokerage Orders On the clock: Time-related orders At your command: Condition-related orders The joys of technology: Advanced orders Buying on Margin Examining marginal outcomes Maintaining your balance Striving for success on margin Going Short and Coming Out Ahead Setting up a short sale Oops! Going short when prices grow taller Feeling the squeeze Chapter 18 International Stock Investing Opportunities Investigating the Basics of International Stock Investing The easiest way to invest: American Depositary Receipts (ADRs) Before you buy: Political considerations An important distinction: Developed markets versus emerging markets International Stock Investing via Exchange-Traded Funds Global ETFs Region-specific ETFs Country-specific ETFs Creative international ETFs Checking Out International Investing Resources Chapter 19 Getting a Handle on DPPs, DRPs, and DCA . . . PDQ Going Straight to Direct Purchase Programs Investing in a DPP Finding DPP alternatives Recognizing the drawbacks Delving into Dividend Reinvestment Plans Getting a clue about compounding Building wealth with optional cash payments Checking out the cost advantages Weighing the pros with the cons The One-Two Punch: Dollar Cost Averaging and DRPs Chapter 20 Corporate and Government Skullduggery: Looking at Insider Activity Tracking Insider Trading Looking at Insider Transactions Breaking down insider buying Picking up tips from insider selling Considering Corporate Stock Buybacks Understanding why a company buys back shares Exploring the downside of buybacks Stock Splits: Nothing to Go Bananas Over Ordinary stock splits Reverse stock splits Keeping a Close Eye on Congress Chapter 21 Keeping More of Your Money from the Taxman Paying through the Nose: The Tax Treatment of Different Investments Understanding ordinary income and capital gains Minimizing the tax on your capital gains Coping with capital losses Evaluating gains and losses scenarios Sharing Your Gains with the IRS Filling out forms Playing by the rules Discovering the Softer Side of the IRS: Tax Deductions for Investors Investment interest Miscellaneous expenses Donations of stock to charity Items that you can’t deduct Taking Advantage of Tax-Advantaged Retirement Investing IRAs 401(k) plans Part 5 The Part of Tens Chapter 22 Ten Indicators of a Great Stock The Company Has Rising Profits The Company Has Rising Sales The Company Has Low Liabilities The Stock Is at a Bargain Price Dividends Are Growing The Market Is Growing The Company Is in a Field with a High Barrier to Entry The Company Has a Low Political Profile The Stock Is Optionable The Stock Is Benefiting from Favorable Megatrends Chapter 23 Ten Ways to Profit in a Bear Market Find Good Stocks to Buy Hunt for Dividends Unearth Gems with Bond Ratings Rotate Your Sectors Go Short on Bad Stocks Carefully Use Margin Buy a Call Option Write a Covered Call Option Write a Put Option to Generate Income Be Patient Chapter 24 Ten Investments and Strategies That Go Great with Stocks Covered Call Options Put Options Cash EE Savings Bonds I Bonds Sector Mutual Funds Motif Investing Bearish Exchange-Traded Funds Dividend Yield Exchange-Traded Funds Consumer Staples Exchange-Traded Funds Chapter 25 Ten Investing Pitfalls and Challenges for 2020–2030 Trillion-Dollar Pension Shortfalls European Crises The Bond and Debt Bubble A Demographic Upheaval Federal Deficits and Debt A Social Security Reckoning Terrorism A Potential Currency Crisis A Derivatives Time Bomb Socialism Part 6 Appendixes Appendix A Resources for Stock Investors Appendix B Financial Ratios Index EULA