The Financial Times guide to investing : the definitive companion to investment and the financial markets

Foreword What's new in the second edition Introduction PART I INVESTMENT BASICS Chapter 1 What is investment? Partnerships; Limited liability; Ordinary shares and extraordinary returns; Shareholder rights; A money-making machine; Dividends and retained earnings; What if I want to sell?; Primary and secondary markets; Bonds; Capital structure; Stocks and shares; Rights issues; Financial institutions; Be proud to be a capitalist!; A note of warning: investment and speculation Chapter 2 The rewards of investment Becoming a millionaire; Simple and compound interest; How well have investors fared in the past?; The importance of income; International comparison; Equities versus gilts; What about risk?; Closing comment; Further reading Chapter 3 Stock markets What is a stock market?; Brokers and market makers; Pricing -- good old supply and demand; A short history of the London Stock Exchange; 'Big Bang'; The international scene; Variety of securities traded; The primary market; The secondary market; The Main Market(The Official List); The Alternative Investment Market; techMARK and the other MARKs; PLUS; Other trading facilities; Who owns UK shares?; The role of stock exchanges; Useful websites Chapter 4 Buying and selling shares Stockbroker services; Choosing a stockbroker; Finding prices; Getting the most out of websites; What happens when I buy or sell shares?; An alternative mechanism; A third trading system; What happens after dealing?; Ways of paying for your shares; Internet dealing; Transferring shares without brokers; Further reading PART II THE INVESTMENT SPECTRUM Chapter 5 Pooled investments Unit trusts; Open-ended investment companies (OEICs); Exchange traded funds (ETFs); Investment trusts (investment companies); With-profits policies; Unit-linked policies; Insurance company bonds; Stock market-linked bonds; Money markets; Hedge funds; Fund supermarkets; Bringing home the significance of high fees Chapter 6 Bonds Gilts; Corporate bonds; Credit rating; High-yield (junk) bonds; Convertible bonds; Foreign bonds; Eurobonds Chapter 7 Unusual share investment Business angels; Venture capital and other private equity; Private equity categories; Overseas shares; Preference shares Chapter 8 Options What is a derivative?; What is an option?; Share options; Call option holders (call option buyers); Call option writers; An example of an option writing strategy; LIFFE share options; Put options; How to trade options; Using share options to reduce risk: hedging; Using options to reduce losses; Index options; Further reading; Websites Chapter 9 Futures Marking to market and margins; Settlement; Buying and selling futures; Universal stock futures (single stock futures) Chapter 10 Spread betting, contracts for difference and warrants Spread betting; Contracts for difference; Warrants; Covered warrants; Further reading; Websites PART III COMPANY ANALYSIS Chapter 11 Company accounts Oh no! Not numbers again!; How to obtain reports; The report and accounts; Profit and loss account; Balance sheet; Cash flow statement; Chairman's statement; Chief executive's review; Director's report and business review; Auditors' report; Five-year summary; Trading statement; Further reading Chapter 12 Key investment ratios and measures From the financial pages; Performance ratios and measures; Financial health ratios and measures; Forward-looking measures; Further reading Chapter 13 Some of the tricks of the accounting trade Goodwill; Fair value; What was our revenue again?; Exceptional items; Stock (inventory) valuation; Depreciation; Capitalisation; Off-balance-sheet items; Share (stock) options; Other tricks; Concluding comment; Further reading Chapter 14 Analysing industries The competitive floor; The five competitive forces; Threat of entry; Intensity of rivalry of existing companies; The threat from substitutes;Buyer (customer) power; Supplier power; Industry evolution; Concluding comments; Further reading Chapter 15 The competitive position of the firm The TRRACK system; What makes resources extraordinary?; Investment in resources; Leveraging resources and over-exploiting them; Concluding comments; Further reading PART IV MANAGING YOUR PORTFOLIO Chapter 16 Companies issuing shares. New issues; Rights issues; Other equity issues; Scrip issues; Share buy-backs and special dividends Chapter 17 Taxation and investors Stamp duty; Tax on dividends; Capital gains tax; Interest-bearing instruments; Inheritance tax, Individual savings accounts; Personal pensions; Enterprise Investment Scheme; Venture capital trusts; Offshore investment Chapter 18 Mergers and takeovers Merger motives; Financing mergers; The rules of the takeover game; Who wins from mergers?; Final comment: Why do mergers fail?; Further reading Chapter 19 Investor protection Protecting investors from wayward financial service professionals; Regulation of markets; Regulating of companies; Self-protection Chapter 20 Measuring performance: indices and risk Indices; Risk; Diversifiable risk; Websites; Further reading Chapter 21 Investment clubs How to set up a club; The unit valuation system; Bank account; Brokers; Tax; Further reading Glossary List of useful Internet addresses Index