1. Using this Book

2. Investing

Saving comes first
Investing defined
What should you invest in?

3. Numbers

Compound interest
Rule of 72
Inflation
Time value of money
Taxation
Rule of 3s
Rule of 5s
Double to get even
Statistics
Error detection by 9s
Accounting

4. Critical Concepts

Risk and reward
Yield curve
Time horizon
Diversification
Efficient frontier
Opportunity cost
Supply and demand
Human frailty

5. Debts

Cash
Certificates of deposit
Fixed-rate annuities
Life insurance
U.S. Treasury bonds
Municipal bonds
Mortgages
Corporate bonds
Asset-backed debts
Zero-coupon bonds
Treasury inflation protection securities
Foreign bonds
Loans to friends and relatives
Summary of debts

6. Equities

Common stocks
Preferred stocks
Foreign stocks
Real-estate investment trusts
Variable annuities
Variable life insurance
Summary of equities

7. Pearls and Perils

Tangibles
Theater, musicals and motion pictures
Penny stocks and venture capital
Commodity futures, naked options and
...short sales
Limited partnerships
Viatical settlements
Summary of pearls and perils

8. Mutual Funds

9. The Players

Brokers
Insurance agents
Financial planners
Certified Public Accountants
Trust officers
Money managers
Consultants
Chartered Financial Analysts
Registered Investment Advisers
Summary of the players

10. Economic and Market Statistics

Reading:

Local Newspaper
National or international
...newspaper
Periodicals
Financial reports

Indicators:

Inflation
Gross domestic product
Unemployment
Federal budget deficit
Exchange rates
Interest rates
Stock market index
Stock market index P/E
Stock market index earnings
... yield
Stock market index dividend
... yield
Stock market index yield ratio
Summary of economic and
... market statistics

11. Security Analysis

Technical indicators:

...Daily volume
...Institutional ownership
...Insider trading
...Short interest
...Stock splits
...Earnings surprises
...Initial public offerings

Fundamental indicators:

...Growth:

...Physical growth rate
...Revenue growth rate
...EPS growth rate
...PEG ratio

...Value:

...Free cash flow
...Price-to-sale ratio
...Dividend growth rate
...Stock buybacks
...Price-to-book value

...Universal:

...Economic value added
...Market value added

Summary of security analysis

12. Performance Measurement

How ya' doin'?

Total return
Annual compound total return
Additions/withdrawals
Time-weighted versus
...dollar-weighted return
Cumulative return
Fees and expenses
Income taxes
Consistent performance
... reporting

Compared to what?

Purchasing power
Peer group rankings
Benchmarks

13. Risk Measurement

Are you comfortable with the risk you assume?

Current Portfolio
Avocations
Risk testing
Stress testing

Are you getting paid for the risk you assume?

Volatility of returns
Beta coefficient
Risk premium
Alpha coefficient
R-squared
Duration

Summary of risk measurement

14. Synthesis

Case 1: A home down payment
Case 2: A child's college education
Case 3: A comfortable retirement income
Observations on synthesis

15. Parting Remarks

Glossary

Index