The Handy Investing Answer Book. Paul A Tucci

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СКАЧАТЬ 163, 167, 171, 173, 175, 176, 180, 183, 185, 188, 190, 193, 196, 198, 201, 203, 205, 209, 210, 213, 216, 219, 222, 224, 226, 232, 236, 239, 242, 244, 246, 249, 255, 259, 261, 266, 282, 285, 289, 292, 296, 299, 301, 310, 314.

      Dan Smith: p. 88.

      All other photos are public domain. Line art graphs by Kevin S. Hile.

Introduction

      The investing system is among the most highly complex systems that exist because there are so many variables and strange constants. It seems easy to understand the simplicity of it all, as buyers and sellers meet in a market. And based upon this, prices are created and money is exchanged. But the numerous variables that play a large part, as well as the unknown or unexpected events and happenings that can occur, can in seconds devastate a position or lead to wealth.

      Combine this with the crowdlike movement of the participants, the information flows that influence variables, and government action or lack of action, and it can get pretty confusing. There are even unpredictable natural events thrown in.

      But it can all be understood by any ordinary person. The Handy Investing Answer Book question-and-answer format helps readers break down the investing tree into its essential branches, twigs, and leaves. Most likely, one can garner some tiny piece of information that may greatly help with financial decision making.

      Fear, and the movement of investors as a result of their perceptions of the markets, news, or variables that may impact a stock, category, or economy, plays a big role in determining how successful an investment will be, both in the short and long term. Your time horizon—whether you are investing for the long term or you are interested in making a rather short-term gain—may determine what the best strategy is, the approach to take, and the risk you are willing to bear. Depending on how you look at an investment, your overall performance may be greatly different.

      This book does not go into a great deal of depth into a few areas of investing that are quite complex and outside its scope: technical analysis, options and futures trading, day trading, hedge funds, currency trading, and derivatives can even be tough for professionals to excel in. Instead, I try here to cover the most essential areas of investing and give mention to other areas with the hope that you will learn more about other investing subjects separately if you wish to explore them in greater depth. The Handy Investing Answer Book will take you through a logical progression of questions and answers to provide you context, definitions, and explanations so that you may make better-informed investment decisions.

      I hope you enjoy it.

      —Paul A. Tucci

HISTORY

      How long have people been investing?

      In approximately 1700 B.C.E., the Code of Hammurabi, discovered in 1902, laid out a set of rules for investing. Babylon, an ancient city in what is now Iraq, was ruled by various kings; the sixth king, Hammurabi, ruled for nearly 43 years. Under Hammurabi, a set of codes were enacted that helped the king rule his people. Although many of the codes described basic laws and governance, some codes described rules involving investing, loans, and financial transactions. Some copies of the original codes predate the main codes, which were etched upon a large stone, by several decades.

      What do the Hammurabi Codes describe?

      Some of the codes or laws describe what happens if commercial deals are not paid, the transfer of property, loan repayment, rent/lease arrangements, interest on property, and contract laws, among many other subjects.

      What other city-states helped contribute to modern-day investing?

      There are many other places around the world and in different periods of time that shaped and formed modern-day investing. In the 1300s, the city-state of Venice was a major center for the clearing or exchanging of obligations held by one owner, and exchanging them with another owner. Venetians began to do what today’s modern brokers do: bringing buyers and sellers together in order to transact a financial obligation. These same Venetian traders even engaged in international finance by buying and selling obligations owned by various European governments.

      Stock tickers like this one, invented by Edward Calahan in 1863, reported changes in stock prices by printing out long strips of paper. They were not replaced until computers came into more common use in the 1970s.

      When was the stock ticker invented?

      Although it was invented by Edward Calahan in 1863, it was unveiled in New York City in 1867. The stock ticker machine was later improved by Thomas Edison in 1869 and was widely used until the 1970s, when it was gradually replaced by computer terminals. The machines were able to communicate current prices of stocks, which previously had been handwritten, or expressed verbally, and could transmit and СКАЧАТЬ