投资学全英文ppt3.ppt

Chapter 3Investment Information and Securities TransactionsCopyright 2014 Pearson Education,Inc.All rights reserved.3-2 Online Investing,Information,and TradingLearning Goals1.Discuss the growth in online investing and the pros and cons of using the Internet as an investment tool.2.Identify major types and sources of investment information.3.Explain the key aspects of commonly cited stock and bond market averages and indexes.4.Review the roles of stockbrokers,including the services they provided,selection of stockbroker,opening an account,and transactions basics.5.Describe the basic types of orders,online transactions,transaction costs,and legal aspects of investor protection.6.Discuss roles of investment advisors and investment clubs.Copyright 2014 Pearson Education,Inc.All rights reserved.3-3 Getting Started in Investment ResearchInvestment Education SitesOffer tutorials,online classes and articlesExamples:Investing Online Resource Center,Investor G,The Motley FoolInvestments ToolsDevelop financial plans,set investment goalsScreen stocks on a wide variety of characteristicsPlot charts that track the performance of investments over timeKeep track of your investments by obtaining current stock quotes as well as your overall portfolio valueCopyright 2014 Pearson Education,Inc.All rights reserved.3-4 Figure 3.1 FINRA Investment CalculatorCopyright 2014 Pearson Education,Inc.All rights reserved.3-5 Figure 3.2 Zacks Stock ScreenerCopyright 2014 Pearson Education,Inc.All rights reserved.3-6 Pros and Cons of Using the Internet as an Investment ToolMakes it easier for individuals to do research on investment and to act on that researchExercise same cautions as regular investingRemember:there is no live broker to act as a“safety net”Be skeptical of“free”advice onlineKnow what you are buying and from whomWatch out for frequent tradingHigh transaction costsHigher taxes on short-term gainsBeware of the risks of margin tradingCopyright 2014 Pearson Education,Inc.All rights reserved.3-7 Types of Investment InformationDescriptive Information factual data on past behavior of economy,market,industry company or given investmentAnalytical Information available current data in conjunction with projections and recommendations about potential investmentsCopyright 2014 Pearson Education,Inc.All rights reserved.3-8 Figure 3.3 A Report ContainingDescriptive InformationCopyright 2014 Pearson Education,Inc.All rights reserved.3-9 Types of Investment InformationEconomic and current eventsIndustry and company informationInformation on alternative investmentsPrice informationInformation on personal investment strategiesCopyright 2014 Pearson Education,Inc.All rights reserved.3-10 Sources of Investment InformationEconomic and Current Event InformationFinance Journals:Wall Street Journal,Barrons,Investors Business DailyGeneral newspapers:The New York TimesInstitutional News:Dow Jones,Bloomberg Financial Services,AP,UPI,CNNMoneyBusiness Periodicals:Fortune,Forbes,Business WeekKiplingers Personal Finance,Money,Smart Money,WorthGovernment Publications:Economic Report of the President,Federal Reserve BulletinSpecial Subscription Services:Kiplinger Washington LetterCopyright 2014 Pearson Education,Inc.All rights reserved.3-11 Sources of Investment Information(contd)Industry and Company InformationGeneral business periodicals:Wall Street Journal,Business Week,Forbes,FortuneTrade publications:periodicals devoted to a specific industryRegulation FD:requires critical company information to be disclosed simultaneously to investment professionals and publicCompany Web sitesStockholders Reports:report published annually by publicly held corporationsForm 10-K:annual statement filed with SEC by all companies with publicly traded stockF:SEC-maintained website with free access to SEC filingsCopyright 2014 Pearson Education,Inc.All rights reserved.3-12 Table 3.1 Online Sources for Industry and Company InformationCopyright 2014 Pearson Education,Inc.All rights reserved.3-13 Table 3.2 Popular Offerings of the Major Subscription ServicesCopyright 2014 Pearson Education,Inc.All rights reserved.3-14 Sources of Investment Information(contd)Industry and Company Information(contd)Comparative Data Sources:Dun&Bradstreets Key Business RatiosSubscription Services:Standard&Poors Corporation,Mergent,Value Line Investment SurveyBrokerage Reports:research reports available to brokerage firms clientsInvestment Letters:recommendations of experts in securities investmentCopyright 2014 Pearson Education,Inc.All rights reserved.3-15 Sources of Investment Information(contd)Price InformationQuotations:use ticker symbols to obtain current price data and statistics on companiesTV sources:Bloomberg TV,CNBC,CNN Headline NewsCopyright 2014 Pearson Education,Inc.All rights reserved.316 Table 3.3 Symbols for Some Well-Known CompaniesCopyright 2014 Pearson Education,Inc.All rights reserved.3-17 Sources of Investment Information(contd)Other Online Investment Information SourcesFinancial Portals:supersites on the Web that combine investing features with other personal finance featuresBond sites:online resources for bond and interest rate informationMutual fund sites:online resources for mutual fund information International sites:online resources for global investing,from country research to foreign currency exchangeInvestment discussion forums:websites where investors can exchange opinions on stocks and investing strategies(Examples:Motley Fool,Yahoo!Finance)Copyright 2014 Pearson Education,Inc.All rights reserved.3-18 Sources of Investment Information(contd)Avoiding Online ScamsBeware of stock manipulators posting false news or overly optimistic opinionsAlways know your sourceBeware of“pump-and-dump”promoters who hype a stock and sell out on the inflated pricesBeware of“get-rich-quick”promoters selling worthless investments to nave buyersCopyright 2014 Pearson Education,Inc.All rights reserved.3-19 Sources of Investment Information(contd)Protect Yourself by Asking Five Key Questions:Is the seller licensed?Is the investment registered?How do the risks compare to the potential rewards?Do you understand the investment?Where you can turn for help?Copyright 2014 Pearson Education,Inc.All rights reserved.3-20 Understanding Market Averages and IndexesReasons to use market averages and indexesGauge general market conditionsCompare your portfolio performance to large,diversified portfolioStudy market cycles,trends and behaviors to forecast future market behaviorStock market averages and indexes measure the general behavior of stock prices over timeAverages reflect the arithmetic average price behavior at a given point in timeIndexes measure the current price behavior relative to a base value set at an earlier point in timeCopyright 2014 Pearson Education,Inc.All rights reserved.3-21 Understanding Market Averages and Indexes(contd)Dow Jones Industrial Average(DJIA)Most popular averageComprised of 30 high quality,diversified stocksTracks overall market activityStock makeup can change to better reflect the broader stock marketDow Jones Transportation AverageComprised of 20 stocks,including railroads,airlines,freight forwarders and mixed transportation companiesCopyright 2014 Pearson Education,Inc.All rights reserved.3-22 Understanding Market Averages and Indexes(contd)Dow Jones Utilities AverageComprised of 15 public utility stocksStandard&Poors 500 Composite IndexComprised of 500 stocks from major industry sectorsMore broad-based and representative of overall market than DJIATrue index calculated from 19411943 base period closing market valuesStandard&Poors provide seven other indexes for tracking specific industry sectorsCopyright 2014 Pearson Education,Inc.All rights reserved.3-23 Understanding Market Averages and Indexes(contd)NYSE Composite IndexIncludes all stocks listed in NYSEAMEX Composite IndexIncludes all stocks listed on the NYSE AmexNasdaq Composite IndexIncludes all stocks traded on the Nasdaq stock marketOften used to track technology companies behavior due to large technology companies listed with NasdaqCopyright 2014 Pearson Education,Inc.All rights reserved.3-24 Understanding Market Averages and Indexes(contd)Value Line Composite IndexIncludes all stocks tracked by Value LineUses equal weighting to eliminate the bias of stocks with large total market valuesWilshire 5000 IndexIncludes 5,000 stocks traded on the major exchangesRussell 1000 IndexIncludes 1,000 largest companiesRussell 2000 IndexIncludes 2,000 small companiesEurope/Australia/Far East(EAFE MSCI)Tracks stocks trade on foreign exchangesCopyright 2014 Pearson Education,Inc.All rights reserved.3-25 Figure 3.5 The DJIA Average Compared to the S&P 500 Index from May 2010 to May 2012Copyright 2014 Pearson Education,Inc.All rights reserved.3-26 Bond Market IndicatorsBond YieldsTotal return on bond purchased at current price and held to maturityInterest+/changes in bond valueReported as annual rate of returnDow Jones Corporate Bond IndexCalculated for utility bonds,industrial bonds and a composite bond averageCopyright 2014 Pearson Education,Inc.All rights reserved.3-27 The Role of StockbrokersStockbrokersAct as intermediaries between buyers and sellers of securitiesTypically paid by commissionsMust be licensed by SEC and securities exchanges where they place ordersClient places order,stockbroker sends order to brokerage firms,who executes order on the exchanges where firm owns seatsCopyright 2014 Pearson Education,Inc.All rights reserved.3-28 The Role of Stockbrokers(contd)Brokerage ServicesPrimary service is to executive clients purchase and sale transactions at the best possible priceClients security certificates often held in street nameStreet name:stock certificates issued in brokerage firms name,but held in trust for the client who actually owns themResearch information is often provided on specific stocks or economic conditionsStatements showing detailed account transactions are providedCopyright 2014 Pearson Education,Inc.All rights reserved.3-29 Types of Brokerage FirmsFull-Service BrokerOffers broad range of services and productsProvides research and investment adviceExamples:Merrill Lynch,A.G.EdwardsPremium Discount BrokerLow commissionsLimited research or investment adviceExamples:Charles SchwabCopyright 2014 Pearson Education,Inc.All rights reserved.3-30 Types of Brokerage Firms(contd)Basic Discount BrokersMain focus is executing trades electronically onlineNo research or investment adviceCommissions are at deep-discountCopyright 2014 Pearson Education,Inc.All rights reserved.3-31 Selecting a StockbrokerFind someone who understands your investment goalsConsider the investing style and goals of your stockbrokerBe prepared to pay higher fees for advice and help from full-service brokersAsk for referrals from friends or business associatesBeware of churning:increasing commissions by causing excessive trading of clients accountsCopyright 2014 Pearson Education,Inc.All rights reserved.3-32 Table 3.5 Major Full-Service,Premium Discount,and Basic Discount BrokersCopyright 2014 Pearson Education,Inc.All rights reserved.3-33 Types of Brokerage AccountsCustodial Account:brokerage account for a minor that requires parent or guardian to handle transactionsCash Account:brokerage account that can only make cash transactionsMargin Account:brokerage account in which the brokerage firms extends borrowing privilegesWrap Account:account that shifts investment decisions to a professional money manager and charges a flat annual feeCopyright 2014 Pearson Education,Inc.All rights reserved.3-34 Basic Types of OrdersOdd-lot Orders Orders for less than 100 shares of stockRound-lot Orders Orders for a 100-share unit or multiples thereofMarket Orders Orders to buy or sell stock at best price available when order is placedFastest way to fill orderCopyright 2014 Pearson Education,Inc.All rights reserved.3-35 Basic Types of Orders(contd)Limit Orders Order to buy at or below a specified price or to sell at or above a specified priceIf price limits are not met,order is not filledFill-or-Kill Orders Limit orders which is canceled if not filled immediatelyDay Orders Limit orders that expires at end of the day if not filledGood-til-Canceled(GTC)OrdersLimit orders that remains in effect for six months unless filled,canceled,or renewedCopyright 2014 Pearson Education,Inc.All rights reserved.3-36 Basic Types of Orders(contd)Stop-Loss(Stop)Orders Typically used to protect investors from stock price declines “Suspended”order is placed to sell a stock if price reaches or falls below a specified levelOrders can be day orders or GTC ordersOnce activated,becomes a market orderCan also use stop orders to buy stocks,such as to limit risk on short salesStop-Limit Orders Orders to sell stock at or better than specified pricePrevents sales at undesirable priceNo sale may occur if prices continues to declineCopyright 2014 Pearson Education,Inc.All rights reserved.3-37 Day TradingDay Trader:an investor who buys and sells stocks quickly throughout the day in hopes of making quick profitsHighly risky,especially if used with margin tradingHigh brokerage commissions due to frequent tradingCopyright 2014 Pearson Education,Inc.All rights reserved.3-38 Tips for Successful Online TradesKnow how to place and confirm ordersVerify stock ticker symbolsUse limit ordersCheck and recheck ordersyou pay for typosDont get carried away Follow a strategyDont churnAvoid or limit margin ordersOpen accounts with two brokersDouble-check orders for accuracy after completionCopyright 2014 Pearson Education,Inc.All rights reserved.3-39 Trading ConsiderationsTransaction CostsFixed commissions used on small tradesNegotiated commissions may be used on large trades Securities Investor Protection Corporation(SIPC)Protects against broker financial failureLimits up to$500,000 for securities and$250,000 for cashDoes not guarantee against churning or bad broker adviceCopyright 2014 Pearson Education,Inc.All rights reserved.3-40 Trading Considerations(contd)Mediation Informal,voluntary dispute resolution process between a customer and a brokerNonbinding if parties cannot agreeArbitration Formal dispute resolution process that requires customer and broker to present arguments before a panelBinding arbitration requires customer to accept arbitration panels decisions and give up right to sue brokerCopyright 2014 Pearson Education,Inc.All rights reserved.3-41 Using an Investment AdvisorAdvisors are required to be registered with SEC No law or regulatory body guarantees competenceLook for advisors with experienceLook for advisors with professional designations Chartered Financial Analyst(CFA)Certified Investment Management Analyst(CIMA)Chartered Investment Counselor(CIC)Certified Financial Planner(CFP)Chartered Financial Consultant(ChFC)Chartered Life Underwriter(CLU)Certified Public Accountant(CPA)Copyright 2014 Pearson Education,Inc.All rights reserved.3-42 Paying an Investment AdvisorTypical profession