Managing Your Investment Portfolio For Dummies, UK Edition

Achieve positive returns on your investments, in any market

With Managing Your Investment Portfolio FD you can build and manage a portfolio of investments that’s flexible enough to provide positive returns, no matter what the market is doing. Inside you’ll find a wealth of strategies and techniques to help you take your investments to the next level. Lean to track and predict volatility; hedge your exposure by going long and short; use strategies like arbitrage, relative value and pairs trading; and dip into distressed assets, options, derivatives, spread betting and much more.

Techniques and strategies covered include:

• Tracking and predicting volatility, and making short-term gains on very volatile markets
• Hedging exposure and going long and short
• Arbitrage (taking advantage of price differences between markets)
• Pairs trading
• Relative value strategies
• Distressed assets (things written off by the mainstream that may have long-term value)
• Earnings surprises (looking for companies delivering better earnings than predicted by analysts)
• Options and derivatives
• Macro trading (looking at key indicators for economic cycles)

Part I: It’s All about Portfolios 7

Chapter 1: Introducing Great Opportunities for Advanced Investors 9

Chapter 2: Assessing Risk: Deciding What Kind of Investor You Are 25

Part II: Picking the Strategies for You 43

Chapter 3: Grasping Basic Hedge-Fund Strategies 45

Chapter 4: Dealing with Volatility and Economic Cycles 63

Chapter 5: Digging Deeper into Alternative Assets: Commodities and Currencies 91

Chapter 6: Assessing the Hedge-Fund Industry: Don’t Believe the Hype 111

Part III: Thinking and Acting Like a Hedgie: Simple Strategies You Can Employ Yourself 129

Chapter 7: Selling What You Don’t Own: Short Selling 131

Chapter 8: Understanding Arbitrage: Big Name, Simple Idea 149

Chapter 9: Weighing Up Growth Versus Value Investing 165

Chapter 10: Gearing up to Use Leverage 187

Chapter 11: Stepping into Structured Investments 197

Chapter 12: Benefitting from Shareholder Activism 211

Part IV: Delving into More Specialist Techniques (with a Little Help) 229

Chapter 13: Advanced Investing in Commodities: Sharks and Rocket Scientists 231

Chapter 14: Investing in Emerging-Market Equities and Currencies 253

Chapter 15: Investing Macro Style: Seeing the Big Picture 269

Part V: Tools of the Trade: Useful Instruments 295

Chapter 16: Following Indices: Exchange-Traded Funds and Other Trackers 297

Chapter 17: Taking a Punt on the Financial Markets 325

Part VI: The Part of Tens 339

Chapter 18: Ten Top Tips to Protect Your Stash 341

Chapter 19: Ten Hedge-Fund Style Techniques to Grow Your Wealth 347

Index 353

David Stevenson is a columnist for the Financial Times where he writes the Adventurous Investor section. He is also a columnist for Investors Chronicle and author of Investing in Shares For Dummies, UK edition.

Watch the value of your portfolio grow, in bull, bear and sideways markets alike

The basic building block for any investor should be the humble portfolio; a range of assets held within your stock-broking or investing account. Why? Because when you diversify your portfolio, you reduce risk. Many of the best professional money managers have built successful careers using this approach, looking to a range of asset classes and investment strategies to achieve positive returns in any market. Here David Stevenson shows how you can use many of these strategies in your own portfolio.

• Portfolio management basics – get the lowdown on traditional strategies and the latest techniques for protecting your nest egg while growing your wealth
• Mix it up – discover why asset diversification is the key to creating a winning portfolio and how to find the right mix for you
• Meet the hedgies – learn the basics of how hedge fund managers leverage economic cycles and market volatility
• Invest like a hedgie – start using some of the simpler hedge fund techniques, including going long and short, arbitrage, leveraged investing and more
• Play like the pros – learn to use commodities trading, investing in emerging markets, currency trading and other advanced wealth-building strategies and techniques
• Bet on market moves – make use of spread betting, options trading, ETFs, structured investments and other innovative ‘tools of the trade’

Open the book and find:

• Guidance on tailoring a portfolio to your investing style and long-term goals
• Ways to hedge your exposure by going long and short
• Techniques for making short-term gains on very volatile markets
• ???Hedgie??? strategies, including arbitrage, macro trading, relative value and more
• Tricks for profiting from distressed assets and undervalued companies
• Key indicators of economic trends and how to cash in on them