South-Western Practical Investment Management

This text is intended for learners studying investments for the first time. Very practical and applied, it is comprehensive enough for those who plan to become CFAs, but remains user-friendly due to its clarity of explanation and its pedagogy. The book contains all standard topics found in the typical modern investments text, but in addition, several chapters of Practical Investment Management are unique. The third edition has two new chapters, one on behavioral finance (Ch. 11) and a second “security analysis” chapter (Ch. 8). Behavioral finance has become a mainstream topic in investment circles, and readers find it very interesting. The chapter on Mortgage-Backed Securities was new to the second edition. In addition to being an increasingly important asset class, mortgage-backed securities provide some thought-provoking questions on fixed income valuation. The third edition has two new chapters, one on behavioral finance and a second “security analysis” chapter. Behavioral finance has become a mainstream topic in investment circles, and students find it very interesting. The chapter on Mortgage-Backed Securities was new to the second edition. In addition to being an increasingly important asset class, mortgage-backed securities provide some thought-provoking questions on fixed income valuation. Bob Strong has an engaging writing style along with practical experience making this a very solid, yet very friendly, book for readers. Review 1. The Concept of Investing. 2. Understanding Risk and Return. 3. The Marketplace. Appendix: Statement of the Standards of Professional Conduct. 4. Bond Fundamentals. 5. Common Stock. 6. Market Mechanics. 7. Fundamental Stock Analysis. 8. Valuation Tools. 9. Technical Analysis. 10. Market Efficiency. 11. Behavioral Finance. 12. Gathering Investment Information. 13. Market Indexes. 14. Convertible Securities. 15. Investing Internationally. 16. Why Diversification? Appendix: Arbitrage Pricing Theory. 17. The Role of Derivative Assets. Appendix: Option Pricing. 18. Managing the Equity Portfolio. Appendix: Index Overwriting. 19. Managing the Fixed Income Portfolio. 20. Mortgage-Backed Securities. 21. Investment Companies. Appendix: Tax Considerations. 22. Performance Measurement and Presentation. 23. Contemporary Issues. About the Author Bob Strong is University Foundation Professor of Investment Education and Professor of Finance at the University of Maine. He holds a Bachelor of Science degree in engineering from the United States Military Academy at West Point, a Master of Science degree in business administration from Boston University, and a PhD in finance from Penn State University. He has also been a visiting professor of finance at Maine Maritime Academy and at Harvard University, where he was Deputy Director of the Summer Economics Program from 1997–1999. He is a Chartered Financial Analyst. Dr. Strong has consulted on risk management and asset valuation for organizations such as Eastern Maine Healthcare, Bangor Hydro Electric Company, Maine Public Service Company, Energy Atlantic, the Maine State Police, the Maine Forest Service, Irving Oil, James W. Sewall Company, and Texas Instruments. He has been a conference speaker for the Chicago Board Options Exchange, the Chicago Board of Trade, and the American Stock Exchange. His current research interests center on investor asset allocation. In addition to four successful textbooks, he has published in journals ranging from the JOURNAL OF FINANCE and THE JOURNAL OF PORTFOLIO MANAGEMENT to the trade journals PENSIONS & INVESTMENTS and FUTURES.