Description of The Investor's Toolbox, 1st Edition
After a turbulent three years, equity markets are returning to their historical norm of single digit percentage annual returns.
Investors want to continue investing, but are concerned about the risk of doing so. The events of the past two years have heightened this risk aversion. But at the same time new techniques are now available to private investors that allow them to tailor their risk much more precisely, and at the same time to enhance their returns. Options are one way they can do this, but there are other instruments too, including individual stock futures, covered warrants, CFDs, exchange traded funds, and spread betting.
This is the first book to set out all the choices open to investors. It explains how each of the derivative instruments works, the costs of dealing, the relationship to underlying share prices, and the risks involved. It shows how these instruments can be used alongside ordinary equity ownership, and provides examples of strategies designed to achieve specific ends.
In short, Peter Temple's guide is what ordinary equity investors have been waiting for. It will give them confidence to step up from simple share ownership to the wider opportunities now available.
The book is a practical guide to using these instruments to increase returns, hedge, speculate or move money in and out of markets efficiently, firmly aimed at the private investor - so its long on commonsense and omits the more daunting maths. It works its way methodically through futures, CFDs, spread betting, options, traditional and covered warrants, and Exchange Traded Funds ("unit trusts in drag"), setting out their characteristics and costs, and with useful examples and relevant do's and don'ts.
Basic uses and trading strategies are covered well, and there are useful appendices on brokers, information, software and websites. This admirably clear and well laid out book is an excellent introduction to the opportunities now open to the nimble private investor, and the experienced investor will also find it worthwhile. Stephen Newman
This is an exceptionally clear and readable explanation of modern stock market and other financial market trading instruments that can be otherwise hard to understand. The author cuts through the hype that the industries use to promote their products and makes expert and critical assessments of how CFDs, spread betting, covered warrants, options and others work, and how they compare with each other.
The text is on heavy duty glossy paper, with colour illustrations from web sites, and includes an amusing bonus in a history of economics.
Above all, the author does not waste words. And the book is beginner-friendly, and shows you how to select suitable software and harness the power of the Internet.
As a writer in the same field as Peter Temple, I can tell the depth of research that has gone into this book, over years spent writing books on areas that have some overlap, and articles for financial magazines and so on.
This book is not from a multi-millionaire investor, but is more lucid and useful than many that are. It is from a former City analyst who understands how markets work.
I welcome this book because, in the field of investment literature, I am absolutely sick of either hype books that are trying to help nobody but the author or the services he is selling, or over-complicated books that in reality are saying nothing. Hugh Thomas
For those who want to learn more about CFDs warrants and spread betting the best book is The Investors Toolbox. It's a sensible book with easy-to-follow rules to help stop you losing your shirt. Well-researched and put together, it's a must. Brian Denney
Contents of The Investor's Toolbox, 1st Edition
Introduction
1. Derivatives history
- Introduction
- Early days
- Help for farmers
- The magic formula
- Futures markets proliferate
- New products take the limelight
2. Basic concepts
- Underlying
- Contracts
- Cash settlement
- Expiry dates
- Fair value
- Gearing
- Hedging
- Indexes
- Margin
- Short selling
- Time value
- Volatility
3. Futures
- Basic futures
- Futures prices
- What you can trade
- Beware the professionals
4. Contracts for Difference (CFDs)
- CFDs basics
- CFD mathematics
- CFD rules of the road
- A final word on gearing and risk
5. Spread betting
- Advantages of spread betting
- Margin
- Types of bet
- A final word
6. Options
- What is an option?
- Calls and puts
- In and out-of-the-money
- Volatility
- Options prices and how they are calculated
- Where to find options
- Option trading as speculation
- Option trading as insurance
- Postscript - writing options
7. Warrants
- Traditional warrants
- Covered warrants
- Basic strategies
- How the warrant market may develop from here
8. Exchange-Traded Funds (ETFs)
- History of ETFs
- How do ETFs work?
- The pluses and minuses
- Where are ETFs quoted?
- Why you should consider using ETFs
- Where ETFs go from here
11. Trading Strategies II - Options and Warrants
- Geared speculation
- Hedging
- Writing options
- Complex strategies
12. Developing your plan
- Trading rules
- Money management
- Trading tips for specific tools
- Developing your plan by looking at your assets
- Using charts and other software
Appendices
1. Derivatives comparison chart - dealing specifics
2. Finding the information
3. Software
4. Further reading
5. Glossary of web sites
Index
About Peter Temple
Peter Temple has been working in and writing about financial markets for the last 33 years. After an 18 year career in fund management and stockbroking, he became a full time writer in 1988.
His articles appear in the Financial Times, Investors Chronicle and a range of other publications. He has written more than a dozen books about investing, mainly aimed at private investors.
He and his wife live in part of a converted bobbin mill in the Lake District.
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