Visual Guide to Financial Markets
The essential guide for anyone trying to get a handle on the fundamentals of investing, the Bloomberg Visual Guide to Financial Markets distills 30 years of Bloomberg expertise into one straightforward, easy-to-read volume. The book teaches readers about three basic investment options—governments, companies, and real assets, including gold and other commodities—and offers valuable insights into money-market securities, bonds, stocks, derivatives, mutual funds, exchange-traded funds, and alternatives.
Designed to help financial professionals, students of finance, and individual investors understand the markets in which they're investing, the book begins with simple investments before moving on to more complex choices.
- Explains bonds, stocks, derivatives, mutual funds, exchange-traded funds, and alternatives such as hedge funds
- Explores the three Rs of returns, risks, and relative value that are associated with each type of investment
- Provides a highly visual presentation with an emphasis on graphics and professional applications
The Bloomberg Visual Guide to Financial Markets gives the reader a clear picture of what underlies market structure, instruments, and dynamics and how to capitalize on these elements.
Part I: Direct Investing 1
Chapter 1: Overview 3
Three Rs 6
Chapter 2: Government 11
Three Rs 15
Three Rs 21
Notes and Bonds 24
Three Rs 27
Chapter 3: Companies 35
Money Markets 35
Three Rs 39
Notes and Bonds 42
Three Rs 46
Three Rs 55
Chapter 4: Hard Assets 63
Three Rs 66
Three Rs 71
Real Estate 73
Three Rs 75
Chapter 5: Indexes 79
Hard Assets 85
Chapter 6: Government Revisited 87
Municipal Bonds 88
Three Rs 91
Mortgage-Backed Securities 93
Three Rs 95
Chapter 7: Companies Revisited 99
Preferred Stock 99
Three Rs 101
Convertible Securities 103
Three Rs 105
Bank Loans 106
Three Rs 109
Chapter 8: Hard Assets Revisited 113
Master Limited Partnerships 114
Three Rs 116
Real Estate Investment Trusts 118
Three Rs 120
Part II: Indirect Investing 123
Chapter 9: Overview 125
Three Rs 127
Chapter 10: Derivatives 129
Futures and Forwards 129
Three Rs 134
Options and Warrants 137
Three Rs 142
Interest-Rate Swaps 147
Three Rs 149
Credit Default Swaps 152
Three Rs 154
Three Rs 162
Alternative Funds 165
Three Rs 168
Chapter 12: Indexes Revisited 173
Appendix: Bloomberg Functionality Cheat Sheet 179
About the Author 181
David Wilson has covered financial markets since the 1980s. He has served as a managing editor, bureau chief, columnist, radio host, and stock market reporter at Bloomberg News, and has taught business and financial journalism courses that he created to staff members worldwide. He currently writes the "Chart of the Day" column for Bloomberg and reports on stocks hourly for Bloomberg Radio.
Financial markets are supposed to be complicated. Otherwise, there wouldn’t be as much money to go around and individual investors wouldn’t need to pay brokers and financial advisers as much to manage their nest eggs. The Bloomberg Financial Series Visual Guide to Financial Markets (Wiley; July 2012; $60.00; 978-1-1182-0423-8; Paperback; Ebook; Enhanced Ebook) makes them easier to understand.
This essential guide provides key information about the forces underlying market structure, instruments, and dynamics and the ways to capitalize on them. Written by Bloomberg Reporter-at-Large David Wilson, the book covers the three basic types of investments and the markets tied to them directly and indirectly:
- Governments, which rely on money from investors to bridge gaps between spending and taxes. The bigger the budget deficit, the more borrowing they need to do.
- Companies, which raise funds to run and expand their business and enable owners to buy and sell their investments.
- Hard assets, which have a presence that goes beyond entries in computer databases or on scraps of paper. Gold, commodities, and real estate fall under this category.
Beginning with simple investments before moving on to more complex opportunities, the book emphasizes the three Rs of financial market investing: returns, risks, and relative value. There are discussions of interest and dividends, the forces that can work against investors, and the methods used to determine whether an asset is cheap, expensive, or fairly valued. Examining how these relate to each investment class, the book presents information on bonds, stocks, derivatives, mutual funds, exchange-traded funds, and indexes.
Lavishly illustrated throughout with charts and other visual aids that highlight the concepts covered, the book features easy-to-reference learning aids, Bloomberg Terminal graphics, and full-color large-format charts. The enhanced ebook version brings the content to life via test-yourself quizzes, video tutorials, zoom-in capabilities, and pop-up content (features are subject to e-reader/tablet functionality).
Filled with practical information presented in a readily accessible, easy-to-use format, the Bloomberg Financial Series Visual Guide to Financial Markets is an indispensable guide to gaining insight into the often confusing world of financial markets.
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