CNBC 24/7 Trading: Around the Clock, Around the World: Around the Clock, Around the World. Forew. by Sue Herera (Cnbc Profit from It Series) - Hardcover

Über die Autorin bzw. den Autor

BARBARA ROCKEFELLER is the founder of Rockefeller Treasury Services, an independent research firm specializing in foreign exchange forecasting and currency management. A seasoned financial writer, she is a columnist for worldlyinvestor.com and has written for many financial publications. She has also taught foreign exchange in 40 countries around the world. Previously, she was Risk Manager in the International Corporate Finance Division at Citibank. She holds a BA in economics from Reed College and an MA in international affairs from Columbia University

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"Marshall McLuhan said, 'We have become a global village,' CNBC has helped lead the way in creating a global village for the financial markets. Readers will finish CNBC 24/7 Trading feeling smarter about the markets and really understanding how important it is to be in the information flow." -Mary Meeker, Managing Director, Morgan Stanley Dean Witter
 
"CNBC 24/7 Trading unlocks the mystery of how individual investors can invest and trade everywhere all the time. This book will become the investment bible that levels the playing field between Wall Street and Main Street." -Robert J. Froehlich, Vice Chairman, Kemper Funds Group Managing Director, Scudder Kemper Investments
 
"TD Waterhouse has operations in eight countries, so we see that growth in international investing is accelerating. To be successful investing around the globe, investors need both information and insight. CNBC 24/7 Trading covers what individual investors need to know in a thorough, easy to understand way." -Steve McDonald, CEO, TD Waterhouse
 
From the Foreword
 
"CNBC 24/7 Trading . . . embraces the reality that the markets never stand still . . . this book is a guide to the emerging 24/7 marketplace, a road map to the potential rewards for investors who can grasp that marketplace's opportunities and understand its risks."-Sue Herera
 
"This definitive book on investing in the 24/7 markets provides the comprehensive tools for active investors and market pros alike. Offering information and advice on trading, obtaining research, measuring market volatility, and assessing local market risk, no smart investor should venture without it." -Linda R. Killian, CFA, Principal, Renaissance Capital

Aus dem Klappentext

The advent of the Internet has turned investing into a round-the-clock, global occupation-24 hours a day, seven days a week. Profits are just waiting to be made somewhere, any time of the day or night-if you know how to find them.
 
Now, CNBC, the world leader in business news, draws on its renowned resources to provide a road map to today's ever expanding wide-open world of information and investment opportunities. In CNBC 24/7 Trading, CNBC and financial expert Barbara Rockefeller show individual investors how to make sense of the flood of facts, figures, and theories coming our way-and reap the rewards they offer.
 
Orienting you to the challenges of today's new markets and technology, and presenting the strategies that work best around the world, CNBC 24/7 Trading helps you synthesize, clarify, and prepare to profit from the market that never sleeps. Here you will learn:
* Why liquidity is key to successful trading-and how to assess it
* How to analyze risk to minimize losses
* How global ECNs work
* How to scan and screen for stocks around the world
* The ins and outs of ADRs, exchange-traded funds, and iShares
 
. . . and much more. And this is only the beginning. As accessible yet savvy as CNBC's television programs, this is a groundbreaking book that investors of all levels will turn to again and again. Because every time a closing bell rings, another market is opening somewhere in the world-and another opportunity awaits.
 
CNBC is the recognized global leader in business news, providing real-time financial market coverage and business information to more than 160 million homes and offices worldwide. CNBC and Wiley are proud to launch the "CNBC Profit from it" book series with this initial title, CNBC 24/7 Trading.

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GETTING STARTED IN 24/7 TRADING

Getting started in 24/7 trading requires you to review all of the factors that contribute to the way you invest and your choice of investment vehicles. What's your investment style? Do you want quick returns, or are you more interested in long-term capital gains? Are you a value investor or a momentum investor? What's your risk comfort level? You should carefully consider all of these issues--and more--before getting started in the extended-hours market or in researching and buying foreign securities. This chapter provides some food for thought to help you answer these questions.

"TWO-BASKET" INVESTING

As a practical matter, most people split their portfolios between two baskets. One is held for the long term and the other is actively traded. The actively traded basket is usually considered to carry more risk, sometimes to the extent of being designated "mad money." Trading 24/7, which encompasses extended-hours trading and trading in foreign stocks, is usually--and logically--consigned to the actively traded basket. Long-term holdings can more easily be bought and sold during the regular working hours of the exchanges, when there is maximum liquidity. Foreign stocks, unless they are in the form of ADRs, iShares, or mutual funds, are traded during the exchange hours of their home countries. Aside from the Americas and a few hours of overlap with Europe, foreign stocks are traded outside regular U. S. market hours.

With the two-basket model, we assume that the composition of the long-term basket changes very little and the actively traded basket changes continuously, depending on how much time the investor spends on it. There is a tendency to regard the long-term basket as low-risk by virtue of its having a long term and low turnover. This may or may not be true in the statistical sense. Similarly, the actively traded basket may or may not carry a higher risk. A stock doesn't become low-risk because it is consigned to the long-term basket; its riskiness is inherent and measurable. Likewise, a stock isn't high-risk because the investor chooses to trade it actively. A long-term basket comprised of high-risk stocks can easily have a more variable return than an actively traded basket that is managed with discipline. Thus, theoretically, we could design a low-risk long-term basket consisting entirely of foreign stocks and pair it with an actively traded basket of Fortune 100 stocks--the exact opposite of how we usually imagine the two-basket model to be distributed.

One goal of this book is to demonstrate that each combined portfolio has a distinctive risk-return profile. Trading 24/7 forces investors to examine the riskiness inherent in each stock and in how the stocks are combined to form a portfolio. Together, the long-term basket and the actively traded basket constitute a portfolio, and investors may be surprised when they evaluate the risk and expected return of the combined portfolio.

The evaluation process may change the way you think about investing and trading in general. You may choose to reallocate funds between the two baskets. You may decide to trade more actively--or less actively.

WHAT'S YOUR INVESTING STYLE?

Choosing an investment style is the first important decision you have to make. Active trading is inherently different from buy-and-hold investing--not in the analytical process, but in understanding risk and applying trading rules. If you're trading 24/7, you're most likely an active trader. Electronic domestic and international extended-hours trading makes execution efficient, but it also magnifies conceptual and execution errors. These are your errors when you're doing it yourself, so you will need to tread carefully. Extended-hours trading and international trading are qualitatively different from in-hours domestic trading or investing. For example, when you're buying a Chinese dot-com at midnight, you do not have the same investor protections that you have when you buy 100 shares of IBM from your local U. S.-registered broker at noon. "Trade like a professional" means more than being able to click "okay" on a computer screen.

The good news is that once you develop a global worldview, you will be able to see opportunities more clearly and steer clear of profit-draining investments and strategies. You can take charge of your portfolio or decide against doing it yourself and hire a professional. This book focuses on how to trade yourself or, at a minimum, how to gain the information you need to speak confidently and knowledgeably with financial professionals. You can make sensible deductions about risk by performing your own research via the Web, cable news networks like CNBC, and newspapers and magazines. You can understand and conquer foreign exchange risk. You can use technical analysis to avoid bad timing (at the very least) without becoming a slave to charts. You can become an evolved trader who calculates both the upside and the downside risk in advance, and exercises the discipline to exit trades at preset limits. Professionals know that losses are inevitable; the trick is to trade in such a way that gains far outweigh losses.

WHAT'S YOUR TARGETED HOLDING PERIOD?

Investing is a dynamic process, whatever the pace of your portfolio turnover. It is a process of getting from point A (your initial equity) to point Z (your ending equity). When you view investing as a lifelong process, the distinction between "trading" and "investing" becomes a thin line. Many people think of "trading" as an irresponsible, high-risk speculative endeavor, whereas "investing" connotes a more disciplined, low-risk approach to "saving." Although speculators may seem to have a higher risk tolerance, they may, in fact, have a lower risk tolerance, which accounts for their short holding period (especially if they use leverage). In other words, they trade more actively to lower their risk by being out of the market some of the time. Traders and investors have the same goals and engage in the same thought processes and actions; they simply have a different expected holding period...