0749456892_How_the_Stock_Market_Work

Sach ve thi truong chung khoan

ii iiii iiiiii iivv P ublisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the mate- rial in this publication can be accepted by the editor, the publisher or either of the authors. First published in 2002 Reprinted in 2002, 2003 Second edition, 2004 Reprinted in 2005, 2006, 2007 (twice), 2009 Third edition 2010 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 525 South 4th Street, #241 London N1 9JN Philadelphia PA 19147 United Kingdom USA www.koganpage.com © Michael Becket, 2002, 2004 © Michael Becket and Yvette Essen, 2010 The right of Michael Becket and Yvette Essen to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. ISBN 978 0 7494 5689 4 British Library Cataloguing in Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Becket, Michael (Michael Ivan H.) How the stock market works : a beginner's guide to investment / Michael Becket, Yvette Essen. -- 3rd ed. p. cm. Includes index. ISBN 978-0-7494-5689-4 1. Portfolio management. 2. Investment analysis. 3. Stock exchanges. I. Essen, Yvette. II. Title. HG4529.5.B43 2010 332.64'2--dc22 2009030898 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by Bell & Bain Ltd, Glasgow If you speculate on the stock market, you do so at your own risk. vv vvii vviiii vviiiiii iixx Contents How this book can help xiii Acknowledgements xv 1. What and why are shares? 1 Quoted shares 2 Returns 4 Stock markets 4 2. What are bonds and gilts? 6 Bonds 6 Preference shares 10 Convertibles 11 Gilts 11 3. The complicated world of derivatives 15 Pooled investments 15 Other derivatives 21 4. Foreign shares 32 5. How to pick a share 34 Strategy 38 The economy 44 Picking shares 45 6. Tricks of the professionals 57 Fundamental analysis 58 Technical analysis 70 7. Where to find advice and information 72 Advice 72 Information 79 . lenders: they are the owners. If there are 100,000 shares issued by the company, some- one having 10,000 of them owns a tenth of the business. That means the. awkward. A public marketplace was devised for trading them – a stock exchange. Companies ‘go pub- lic’ when they get their shares quoted on the stock exchange