An Introduction to Stocks, Trading Markets and Corporate Behavior: The Investor's Guide

Acknowledgments

During the past several years, I was afforded an opportunity to fulfill my continuous quest for knowledge, and sincere and enormous gratitude must be extended to many who have very generously shared of themselves.    

First and foremost, I am deeply grateful to Dr. Karim Menacere for the invaluable guidance, support and encouragement that he provided while studying as a student.  His depth of insight and understanding made possible my success.   

I am also thankful to the Faculty in the Liverpool John Moores University School of Business for sharing their knowledge and expertise in their field; and to everyone else in the department for their help and assistance.  

Last but not the least; I would like to extend my deepest thanks to my mother for her enormous encouragement and support in every sense. 

Preface

There is a need for a greater understanding of financial markets and investing, and this book is designed to meet this need by providing a sound theoretical and practical basis of money management.  It will appeal to those wishing to explore issues fundamental to increased competency when investing, and will enrich the learners’ experience through more critical, reflective and synergistic thinking and planning of money.  

Lack of financial knowledge is not only an economic consideration, but also a social concern garnering greater attention from school administrators, governmental agencies and policymakers.  This concern highlights the fact that widespread gaps in levels of financial literacy exist, and at risk are those who are least familiar with complex savings and investment vehicles, and with financial planning concepts and their long-term benefits. Financial education is a fundamental building block for life, and the need for greater financial knowledge is underscored by the challenges stemming from current social and economic conditions.  

Indeed, individuals are showing an increased interest in personal financial planning, as they assume greater responsibility for their own financial well-being and longevity. Greater knowledge of financial concepts is essential to this endeavor, and acquiring a higher understanding of the various investment products and services in the marketplace helps to increase the likelihood of attaining a secure financial future.  

The ability to navigate a complex financial system and build a sound future requires making intelligent saving and investment choices — yet, many of the products are complex and difficult to grasp, especially for the less sophisticated investor.  Therefore, learned familiarity with financial planning concepts will help provide individuals with a foundation for entering into financial transactions, and equip them with the knowledge necessary to understand the terms and conditions of transactions.  

What is more, competency in the management of money appears to be a skill that does not come naturally to everyone.  For many, unless they are exposed to the practice of sound money management techniques, there is little likelihood of developing an understanding of the benefits regarding long-term savings through investments.  This financial literacy series is designed to provide the depth and breadth of knowledge needed to acquire competence in these areas, and to form a solid basis for planning, decision making and analysis. Today’s complex financial services market offers investors an endless array of products and services to meet individual financial needs, and the degree of choice requires the knowledge to evaluate the options, and the ability to identify those that best suit individual needs and circumstances.

The content and exercises in this book offer an organized, rigorous, and comprehensive approach to developing proper money management skills.  The focus of the material will educate those interested in increasing their aptitude about financial choices and gaining a greater understanding of the benefit of saving through securities investments.  The book is designed to provide a resource for individuals interested in expanding their wealth of knowledge of investing, and emphasizes excellence by providing concise and accessible information.  The curriculum embraces relevant learning and development theories and provides opportunities for an integrated learning experience.

Volume (1) consists of subject content, commonly used abbreviations, core analysis, exercises, and an extensive glossary – with an emphasis on stocks. Future volumes will cover bonds, mutual funds and annuities.  This type of financial awareness will empower individuals to make better-informed investment decisions, assist in planning for their future, and will contribute to a sound lifestyle during working years and through-out retirement.  During the program of study, you will not only learn important concepts, but will have ample opportunities to apply these concepts to real and simulated practice situations.

The development of this material acknowledges that individuals may not necessarily possess the knowledge and skills required to make wise investment choices.  An organized and purposeful book, such as the material in this guide, is an excellent resource that provides knowledge and skills essential for developing proficiencies in the design, implementation, and evaluation of a sound investment plan.  It is the aim of this material to provide practical information by examining best practices and key principles that might be considered when developing an investment strategy.  This book collates a wealth of expertise and insight, and addresses basic definitions, the range of stakeholders and the tools available to consumers when seeking to establish a successful long-term investment strategy.

The current volume, Financial Literacy: Stocks, Trading Markets and Corporate Behavior occupies a unique niche by providing a broad overview of evidence-based investment strategies and methodologies, and provides learners the opportunity to acquire critical skills in money management vital to their long-term financial success. We trust readers will find this guide to be a valuable resource for gaining insight and best practices relevant to saving and investment participation.  This publication is meant for general reading and educational purposes only and is not meant to serve as a recommendation for investments.  

The statements/explanations/concepts that are contained in this book are of a general nature and may not have taken into account the particular objective, aim, need or circumstances of an individual.  Moreover, the contents of this publication do not constitute or imply endorsement or