Investing in Stocks and Shares PDF

Investing in Stocks and Shares PDF

Investing in Stocks and Shares PDF: A Step-by-step Guide to Making Money on the Stock Market explains in plain English how the stock market works; what affects share prices;how to avoid unnecessary risks; and how you can invest successfully in shares, bonds, gilts, options and futures over the long term.

Category: Stock

Author: John White 

Language: English

Free Download link: At the end of the post


A revised, fully updated 9th edition of this bestselling book about investing in stocks and shares.

This book, first published in 1992, is one of the most enduring guides to investment in the stock market ever published. Now in a thoroughly revised, updated 9th edition this bestselling volume has been written and kept up to date by a professional long-term investor. It explains in plain English how the stock market works; what affects share prices;how to avoid unnecessary risks; and how you can invest successfully in shares, bonds, gilts, options and futures over the long term.
It gives step-by-step guidance on:
· how to trade on the stock market, whether it’s going up or down;
· successful stock investment strategies;
· investing at minimum risk in traded options and futures;
· buying bonds, gilts and interest-bearing deposits.


Preface to the Seventh Edition
Investing in Stocks and Shares has proved to be one of the most enduring of guides to investment in stockmarkets since it was first published in 1992. This may be because it is maintained by a professional long-term investor and not by a financial journalist or a salesman peddling a ‘get-rich-quick’ book; or it may be due to the book’s advocacy from the first edition of the importance of seeking dividend growth from investments in shares, and not buckling to the latest investment fashion.

The beliefs expressed in the first edition, that share prices would rise more than alternative investments and that the ‘Logical Investment Strategy’ would have a long term application, have been fulfilled despite the general decline in stockmarkets across the world during 2001–2003. Much of the decline was due to the bursting of the ‘dot-com’ bubble and the belated realisation by investors that mobile phone companies would struggle to grow once everyone had a mobile phone. Readers of earlier editions should have largely avoided both disasters. The prediction in the 6th edition (2003), that stockmarkets would recover, was speedily borne out.

Between 2003 and 2006 the average share price rose by about 60 percent, far outstripping housing, cash and bonds. However, while compiling Table 1 for this book, I was startled to discover that houses had outperformed shares for the ten year period up to 2007. That is the first time that this has occurred since the book’s first edition in 1992.

Nevertheless, the decline in global inflation has lowered expectations of returns from all types of investment. Gilts and house prices have enjoyed a good run in the last six years, but this cannot continue unless inflation (and thence interest rates) falls even further. Indeed, it is economically impossible for stockmarkets and house prices to move in opposite directions for any length of time, since both are ultimately driven by company profits via dividends of wages. Moreover, if houses were to continue to outperform shares, everyone would invest in housing, no one would invest in industry or companies, and everyone would become unemployed. That would either force government intervention to favour investment in shares or would cause a house price crash. Tables and figures have been updated for this new edition.

Unfortunately, taxation rules change so quickly, and so unpredictably, that only a general outline can be given here and the reader is advised not to depend upon tax information given in this book. Particularly exasperating too has been the large number of changes of company names, addresses and telephone numbers since the last edition was published in 2003. All have been updated for this new edition. I have elected generally to omit websites in the main text, despite the outdoubted usefulness of the Internet for seeking information about companies. The rate at which companies change their website addresses has finally over-stretched my tolerance for updating them.

Although expectations of future returns from the stockmarket must be lower than those garnered from the past two decades, there is every reason to suppose that investment in company shares will continue to out-perform other investments in the next few years.

John White, April 2007

Table of Contents- Investing in Stocks and Shares PDF (7th edition)

List of illustrations viii
Preface ix
Introduction 1

1 Why buy shares? 3
The benefits 3
Why do shares rise in value? 9
Are shares right for you? 11
A history of shares 17
The difficulty of selecting shares 26

2 An explanation of shares 28
Basic information 28
Why come to market? 34
More about shares 35
Capital versus income 37
The stock market indices 40
Marketability of shares 42
Market subdivisions 47
Share sectors 47
Types of share 48

3 Factors affecting the price of a share 57
Share dilution 57
The perception of share values 62
The movement of markets 68
The importance of timing 71
Company bids and takeovers 72

4 Avoiding undue risk 76
Avoiding local risk 76
Overseas investments 77
Pooled funds 79
The institutions 89
The zero sum game 89

5 Dealing in shares 92
Certificates or nominee account? 92
The broker 93
Taurus/Crest 98
A summary of charges 102
The mechanics of share dealing 104
When to buy and when to sell 113
The Coppock Indicator 114

6 Stockmarket strategies 116
Some stockmarket investment strategies 116
Modern portfolio theory/risk management 121
The Logical Investment Strategy 122
Summary of the Logical Investment Strategy 124
Construction of a wishlist 126
Construction of a hitlist 128
Valuation of shares 128
Performance assessment 129

7 Investing in traded options and futures 131
Introduction to options 131
Interpretation of charts 141
Futures 146
Other derivatives 146

8 Bonds/gilts/interest-bearing deposits 147
Introduction to bonds and gilts 147
Tax implications of purchases of bonds and gilts 157
Strategies for buying gilts 159
How to buy and sell gilts 161
How to buy and sell bonds 162

9 Six typical case studies 163
Conclusion 173
1 Government privatisations 174
2 The Black-Scholes Model for traded options 176
3 Personal Equity Plans (PEPs) and Tax Exempt Special
Savings Accounts (TESSAs) 178
4 Individual Savings Accounts (ISAs) 179
5 The price of gold 184
6 Split capital investment trusts 186
7 Business and Enterprise Schemes 188
8 Permanent Income Bearing Shares (PIBS) 192
9 Bulletin Board/SEATS 195
10 Value investment 196
11 FRS-3: new accounting rules 198
12 AIM/PLUS 199
13 Emerging markets 201
14 Order-driven markets/SETS 202
15 The Internet 204
16 Capital Gains Tax (CGT) 206
17 Reinvestment of dividends 213
18 Derivatives 215
19 Alternative investments 219
20 Inland Revenue stamp offices 220
21 Self-invested pension plans (SIPPs) 221
Glossary 225
Further reading 241
Useful addresses 242
Index 244


An easy to understand guide to the way the stock market works, and how the investor should go about setting up a successful investment strategy.―What Investment

“A very educational and comprehensive book.
I personally won’t be reading it from cover to cover but it will make an excellent reference book on the subject. Recommend.”- gazzalincs

About the author

Dr John White  is an experienced and successful personal investor and director of an investment company. He has also written a range of chart-analysis software for stock market investment.

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