TOOLS & TECHNIQUES OF INVESTMENT PLANNING
2nd Edition
CHAPTER 1: CASH AND CASH EQUIVALENTS
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 2: U.S. GOVERNMENT SECURITIES
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 4: CONVERTIBLE SECURITIES
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 9: GUARANTEED INVESTMENT CONTRACTS (GICs)
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 12: WARRANTS AND RIGHTS
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 17: EXCHANGE-TRADED FUNDS (ETFs)
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 21: REITS (REAL ESTATE INVESTMENT TRUSTS)
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 22: REAL ESTATE MORTGAGE INVESTMENT CONDUITS (REMICs)
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 23: ASSET-BACKED SECURITIES
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THE TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 25: GOLD AND OTHER PRECIOUS METALS
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 27: LIMITED PARTNERSHIPS
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 28: PRIVATE PLACEMENTS AND VENTURE CAPITAL
WHEN IS THE USE OF THIS TOOL INDICATED?
WHAT FEES OR OTHER ACQUISITION COSTS ARE INVOLVED?
HOW DO I SELECT THE BEST OF ITS TYPE?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 29: AMERICAN DEPOSITARY RECEIPTS
WHEN IS THE USE OF THIS TOOL INDICATED?
WHERE CAN I FIND OUT MORE ABOUT IT?
Causes of Variability in an Investment’s Expected Return
CHAPTER 31: MEASURING INVESTMENT RISK
STANDARD DEVIATION AND VARIANCE
SKEWNESS AND KURTOSIS COMBINED
CHAPTER 32: TIME VALUE CONCEPTS
WHEN IS THE USE OF THIS TECHNIQUE INDICATED?
Present Value of Future Lump Sum Payment
Present Value of Perpetual Annuity
Present Value of Ordinary Annuity
Future Value of Present Lump Sum
Future Value of Ordinary Annuity
Ordinary Annuity Payment for a Given Present Value
Annuity Due Payment for a Given Present Value
Periodic Payment for a Perpetual Annuity (n = 8)
Ordinary Annuity Payment for a Given Future Value
Annuity Due Payment for a Given Future Value
Number of Periods or Term Calculations
Number of Periods for Present Lump Sum Value to Reach Future Value
Number of Periods Present Value Will Provide Ordinary Annuity Payments
Number of Periods Present Value Will Provide Annuity Due Payments
Number of Periods of Ordinary Annuity Payments to Reach Future Value
Number of Periods of Annuity Due Payments to Reach Future Value
Caveat: Final Payment Adjustment When n Is a Non-Integer Value
Rate of Return Required for Lump Sum Present Value to Reach Future Value
Rate Conversions, Compounding Periods, and Effective Interest Rates
Equivalent Annuities/Loan Payments
ADJUSTING FOR INFLATION OR GROWTH FACTORS
Inflation/Growth-Adjusted Rate of Return
Inflation/Growth Adjusted ROR, PVs and FVs
Inflation/Growth Adjusted ROR and Annuities
Up-Front Deductions or Exclusions
Tax-Deferred Earnings or Benefits
Nondeductible Contributions and Tax-Deferred Earnings
Adding Capital Gains or Partially Tax-Deferred Income
Future Value of Annuity Formulas
Present Value of Annuity Formulas
Inflation/Growth Adjusted Formulas
Inflation/Growth Adjusted Rate of Return
Inflation/Growth-Adjusted Payment Streams
CHAPTER 33: MEASURING INVESTMENT RETURN
WHEN IS THE USE OF THIS TECHNIQUE INDICATED?
Simple and Arithmetic Average Annual Returns
Compound and Geometric Average Annual Returns
Simple Versus Compound and Arithmetic Versus Geometric
Nominal and Real (Inflation-Adjusted) Returns
Internal Rate of Return and Net Present Value
Time-Weighted and Dollar-Weighted Annual Returns
After-Tax Return and Taxable-Equivalent Return
How to Compute Net Present Value
How to Compute Internal Rate of Return
Shortcomings of the IRR Method
III. Modified Internal Rate of Return Methods
VI. Using Analytical Methods to Compare Investments
Independent Versus Mutually Exclusive Investments
Incremental Analysis Methodology
CHAPTER 35: SECURITY VALUATION
Discounted Free Cash Flow Models
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 36: ASSET PRICING MODELS
PORTFOLIO THEORY AND ASSET PRICING MODELS
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 37: PORTFOLIO MANAGEMENT AND MEASUREMENT
THE INVESTMENT POLICY STATEMENT
Return Measures For Portfolio Evaluation
Risk-Adjusted Performance Measures
Selecting an Appropriate Benchmark
Risk-Adjusted Measures and Investment Policy
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 38: ASSET ALLOCATION AND PORTFOLIO CONSTRUCTION
Modern Portfolio Theory and Asset Allocation
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 39: INVESTMENT STRATEGIES
TIMING OF INVESTMENT PURCHASES AND SALES
WHERE CAN I FIND OUT MORE ABOUT IT?
WHERE CAN I FIND OUT MORE ABOUT IT?
CHAPTER 41: HEDGING AND OPTION STRATEGIES
WHEN IS THE USE OF SUCH DEVICES INDICATED?
Fundamental Investment Principles
Sales, Stop-Loss Orders, and Short Sales
Short Sales of Close Substitutes
Short Sale of Exchange-Traded Funds
Selling a Forward Contract or Futures Contract
Offsetting Notional Principal Contract or Equity Swap
Options, Futures, and Other Derivatives
Nature of the Derivatives Markets
Options, Spanning, and Synthetics
WHAT ARE THE TAX IMPLICATIONS?
Avoiding Constructive Sale Treatment
Straddle Rule Tax Implications on Closing the Straddle
Economics of Primary Hedging Strategies
CHAPTER 42: LEVERAGING INVESTMENT ASSETS
WHEN IS THE USE OF THIS TECHNIQUE INDICATED?
WHAT ARE THE TAX IMPLICATIONS?
CHAPTER 43: TAXATION OF INVESTMENT VEHICLES
WHY TAXES ARE IMPORTANT T0 THE INVESTOR
ACQUISITION AND DISPOSITION ISSUES
Property Acquired From a Decedent
Timing of Reporting Gain or Loss upon Disposition
INCOME AND EXPENSES WHILE THE INVESTMENT IS HELD
Passive Activity Income or Loss
Deductibility of Investment Expenses Other than Interest
Timing of Recognition of Income and Expenses
THE FEDERAL INCOME TAX RATE STRUCTURE
Dividends from Mutual Funds and REITs
Alternative Minimum Tax Credit
The “Kiddie Tax” – Unearned Income of Certain Minor Children
SELECTED INVESTMENT TAX ISSUES
Original Issue and Market Discounts and Premiums
Short-Term or Long-Term Capital Gain or Loss
More or Less Stock Bought than Sold
Exception for Nonmarketable Securities
Exception for Certain Closed Transactions
Appreciated Financial Position
Certain Trust Instruments Treated as Stock
Sale of Appreciated Financial Position
How to Report Gains and Losses (Form 6781)
Coordination of Loss Deferral Rules and Wash Sale Rules
Holding Period and Loss Treatment Rules
CHAPTER 44: TAX-EFFICIENT INVESTMENT STRATEGIES
TAX EXEMPT EQUIVALENT (TAXABLE EQUIVALENT YIELD)
ORDINARY INCOME, CAPITAL GAIN, AND QUALIFIED DIVIDENDS
TIMING OF CAPITAL GAIN OR LOSS
CHAPTER 45: INVESTMENT STRATEGIES FOR TAX-ADVANTAGED ACCOUNTS
CONVERTING TRADITIONAL IRA TO ROTH IRA
OTHER IRAS AND QUALIFIED PLANS
MEASURING THE EFFECTS OF TAX LEVERAGE
Comparing Alternative Investments
EXAMPLE: GEORGE’S RETIREMENT PLANS
WHICH ASSETS SHOULD BE IN RETIREMENT PLANS?
DISTRIBUTIONS OF EMPLOYER SECURITIES WITH NET UNREALIZED APPRECIATION