Understanding Investments

Learning some of investing's fundamental ideas and the impediments that can interfere with sound investment decisions; knowing that there are ways to protect oneself; the path to becoming a sound investor is available to anyone willing to learn.

Learning whether anyone can beat the performance of the stock market; grasping what the efficient market hypothesis and the debate over its validity can reveal about the answer; how one's opinion can shape their investment strategy.

Learning why stocks, though often not the best place for a newcomer to invest, can be the best means of learning about investing; exploring key ideas like dealers versus brokers; the different kinds of buy-or-sell orders; what stocks really are.

Focusing on a buy-and-hold strategy; grasping the variety of available bonds and the features most important to an investor; these include who issues them, whether they are secured and the timing of payments; laddering holdings for consistent income.

Mutual funds are a type of so-called pooled investments, which allow small investors to hold securities they perhaps could not afford individually; how these pooled investments work; the focus on the open-end mutual fund; a summary prospectus.

Learn how this relatively new option for investors differs from mutual funds; learn the advantages they may have over mutual funds for those making investments outside tax-advantaged plans; learn what depository receipts are and their role in ETFs.

Standard tools for analyzing and selecting stocks and other possible investments; learning how to read a typical financial statement; grasping the meaning of concepts like income statements and balance sheets; what they can tell about a company.

Gaining an additional tool for drilling down into a company to evaluate its investment potential; introducing the concept of valuation models, beginning with the popular method of comparables, which uses ratios like price-to-earnings to value stocks.

The Dividend Discount Model is a stock-pricing model; such fundamentals-based models rest on two ideas; first is that an investment's price should depend only on what it will pay and that future cash is worth less than present cash.

The glamour of initial public offerings can obscure their realities; this lecture explains how most IPOs are done; the Dutch auction method that is sometimes used; what one needs to know if one gets the opportunity to participate in an IPO.

Dividends can be an extremely revealing indicator of a company's value; exploring not only dividends, but several other ways by which companies can reward their shareholders, including preferred stock, dividend reinvestment programs and stock splits.

Although using leverage can offer tempting rewards, the level of risk can be high; exploring how leverage works as one learns about margin requirements and short sales; how leverage impacts potential profits and potential losses.

Gaining the analytical tools to intelligently navigate the choices faced by anyone contemplating an investment in bonds; guiding through the three critical issues which include default risk, inflation protection and how one's earnings may be taxed.

Although bonds are often part of a buy-and-hold investment strategy, they can also be as actively traded like stocks, with just as great a risk; the descriptive terms, jargon, pricing, price-yield relationships and standard practices to encounter.

Today's marketplace contains a variety of mutual funds to choose from, navigating this bewildering array of choices with confidence, learning the key categories for differentiating them, including assets, goals and balance of growth vs. value.

With about $80 trillion of investment opportunities outside the United States, foreign investment can be a tempting option; learning how the rules for diversifying into these investments change; ensuring that foreign investment decisions are wise.

The world of stock and index options and how one can put them to work for themselves at very low or zero risk; learning about call options, put options and strike prices; using the return-enhancing technique known as the covered call strategy.

Learning whether real estate and commodities belong in one's portfolio; if they do, the best instruments for putting them there; a realistic view of these questions; including a look at real estate investment trusts and commodity-focused ETFs.

The role of price cycles in financial markets, the business cycle and the interest rate or credit cycle in one's investment decisions; learning how these cycles work; the best way to protect oneself against their fluctuations.

Selling an investment, whether a winner or loser, can be emotionally difficult; in addition to learning why this is so, grasping the different reasons that selling is often the right decision; techniques that can help offset emotional influences.

The cliché is that high risk brings the potential of high returns; learning in this insightful lecture that the cliché is not true; exploring the two ways risks are classified; the very different expectations of potential rewards that come with each.

Learning key skills for smart investing; knowing how to perform the simple calculations that will enable one to compare returns across different investments; project their future value; estimating a reasonable price to pay for them.

The whole point of investing is reaching a particular goal one has decided on; using the calculating tools one has learned to plan for retirement; its techniques can be applied to any financial goal one sets for themselves.

The many investment products available; practical decision-making about turning financial planning into financial reality; shaping investment choices to match retirement plans; turning those investments into income for expenses after retirement.