Visual Guide to Financial Markets

Bloomberg Financial series Visual Guide to financial markets

An essential resource for anyone looking to get a handle on the fundamentals of investing, the Bloomberg Financial Series Visual Guide to Financial Markets is designed to help you understand and make the most of opportunities in any financial market.

With extensive coverage of the three basic types of investments governments, companies, and hard assets, including gold, commodities, and real estate the book is packed with invaluable information on the markets tied to them directly and indirectly. Lavishly illustrated throughout with charts and other visual aids that highlight the concepts covered, the book brings the information you need vividly to life.

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 factors 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 key information on bonds, stocks, derivatives, mutual funds, exchange–traded funds, indexes, and much more.

Designed to help financial professionals, students of finance, and individual investors alike, the Bloomberg Financial Series Visual Guide to Financial Markets gives you a clear picture of the forces that underlie market structure, instruments, and dynamics and how to capitalize on them. Filled with practical information presented in a readily accessible, easy–to–use format, this book is an indispensable resource for anyone who wants to gain insight into the often confusing world of financial markets.

TheBloomberg Financial Series Visual Guides cover today′s most relevant finance and trading topics in a comprehensive, yet easy–to–follow style. The content is presented in the most visual of manners thus bringing to life key concepts for finance professionals and truly lives up to the series name by examining concepts in a highly visual way all charts are in color and presented in a large format for ease of use. Other strong visual attributes include consistent elements that function as additional learning aids for the reader, such as: Key Points, Definitions, Step–by–Step, Do It Yourself, and Bloomberg Financial Series Visual Guide functionality.

And for e–reader users, the Bloomberg Financial Series Visual Guides are available as enhanced e–books offering special features, like a Test Yourself section where you can test your newly honed knowledge and skills. The enhanced e–book versions also include video tutorials and special pop–up features. They can be purchased wherever e–books are sold.

Acknowledgments ix

Introduction xi

Part I: Direct Investing 1

Chapter 1: Overview 3

Quotations 4

Three Rs 6

Chapter 2: Government 11

Currencies 12

Quotations 13

Three Rs 15

Bills 18

Quotations 20

Three Rs 21

Notes and Bonds 24

Quotations 26

Three Rs 27

Chapter 3: Companies 35

Money Markets 35

Quotations 38

Three Rs 39

Notes and Bonds 42

Quotations 45

Three Rs 46

Stocks 50

Quotations 53

Three Rs 55

Chapter 4: Hard Assets 63

Gold 63

Quotations 66

Three Rs 66

Commodities 68

Quotations 70

Three Rs 71

Real Estate 73

Quotations 75

Three Rs 75

Chapter 5: Indexes 79

Currency 79

Debt 81

Equity 83

Hard Assets 85

Chapter 6: Government Revisited 87

Municipal Bonds 88

Quotations 90

Three Rs 91

Mortgage–Backed Securities 93

Quotations 95

Three Rs 95

Chapter 7: Companies Revisited 99

Preferred Stock 99

Quotations 100

Three Rs 101

Convertible Securities 103

Quotations 104

Three Rs 105

Bank Loans 106

Quotations 109

Three Rs 109

Chapter 8: Hard Assets Revisited 113

Master Limited Partnerships 114

Quotations 115

Three Rs 116

Real Estate Investment Trusts 118

Quotations 120

Three Rs 120

Part II: Indirect Investing 123

Chapter 9: Overview 125

Quotations 126

Three Rs 127

Chapter 10: Derivatives 129

Futures and Forwards 129

Quotations 131

Three Rs 134

Options and Warrants 137

Quotations 140

Three Rs 142

Swaps 145

Interest–Rate Swaps 147

Quotations 149

Three Rs 149

Credit Default Swaps 152

Quotations 153

Three Rs 154

Quotations 161

Three Rs 162

Alternative Funds 165

Quotations 168

Three Rs 168

Chapter 12: Indexes Revisited 173

Futures 173

Options 175

Swaps 176

Funds 177

Appendix: Bloomberg Functionality Cheat Sheet 179

About the Author 181

Index 183

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.