How the Stock Market Works: A Beginner's Guide to Investment

by Michael Becket

Now more than ever, people are being affected by the fluctuations in the global economy and by financial uncertainty - with major impacts on their savings, portfolios and pensions. Fully updated for this fifth edition, How the Stock Market Works tells investors what is being traded and how, who does what with whom, and how to evaluate a particular share or bond in light of rival claims from critics and admirers. From the practical consequences of being a shareholder to a basic coverage of the taxation regime, the book provides a wealth of information on individual product types as well as the key players themselves.

Genres: Nonfiction, Finance, Business, Economics

176 pages, Paperback

First published June 30, 2004

About the author

Michael Becket was for over thirty years a financial journalist with The Daily Telegraph, which included editing regular supplements and for many years he was City news editor. Before that for six years he was a Civil Servant.
His published books include Computer by the Tail (co-author), Economic Alphabet (three editions), Bluff Your Way in Finance, Office Warfare, How the Stock Exchange Works (six editions), An A to Z of Finance, Stakeholder Pensions, and Starting Your Own Business. How the Stock Market Works is now in its seventh edition.

Reviews

[J · Rating 3 out of 5]

I received this book as part of GoodReads FirstReads program.

This book was an excellent introduction to the basics of investing. While readers should keep in mind that it is intended for a UK audience, I thought that the book was still a helpful guide to the fundamentals of the stock market, regardless of nation. The author also makes an effort to specify differences due to locality. I especially appreciated the glossary and index, since they are very useful for this type of material. Overall, I thought this was a useful reference that covered the risks and rewards of the stock market in a straightforward manner. I would recommend it to anyone interested in a simplified guide to investing, especially investing in Great Britain.

[Mohammed Asiri · Rating 3 out of 5]

قرأت الكتاب مترجما إلى العربية، ومما شجعني على قرائته أمران: أنه جاء في الفترة المجانية التي يمنحها تطبيق قاريء جرير شهريا، والثاني أن من مجالات تطوير الذات التي أقرأ فيها خلال هذا العام هي الوعي المالي.
لا أكذبكم القول بأني لم أمر على الكتاب صفحة صفحة لسببين: لقصر المدة التي بدأت فيها القراءة قبل أن تنتهي الفترة المجانية، والأمر الآخر وهو الأهم أنني كنت أحتاج بعضا من المفاهيم العامة والتوجيهات الرئيسية؛ والكتاب مليء ببعض القضايا المتخصصة جدا والتي أظن أنها لا تتناسب مع مبتديء مثلي أو على الأقل مع مبتديء لا يريد الغوص العميق ليكون سمسارا في سوق الأسهم.
يتميز الكتاب بالحداثة والمعاصرة فهو يتكلم عن سوق الاسهم قديما وحديثا ولكنه يقتصر حديثه في اغلب الاحيان على بورصة لندن والسوق البريطانية مما قد يجعل القاريء في حيرة عند رغبته في معرفة شيء مقابل في بلده.
وبعد هذا كله لا أنفي استفادتي من بعض المقولات والقواعد العامة التي ستساعدني سواء إن اردت الاستثمار في سوق الاسهم مباشرة او عن طريق وسيط .

[Darya · Rating 5 out of 5]

The book is very comprehensive for beginners in stock markets investing. I have found a lot of useful information as well as great practical tips. The position of the author is absolutely correct that one should filter any advice prior to using it, being objective and gather knowledge while using soundness and own rational in applying to reality.

[John Bacin · Rating 3 out of 5]

3.5/5. Mostly common stuff but a few clever and helpful bits that will definitely impact my future investing choices. Once I start making some, that is.

[Ahmed Ibrahim · Rating 4 out of 5]

ظهرت البورصة كانعكاس لحاجة الناس للأموال للمساهمة في شركات ومؤسسات كبيرة وفي نفس الوقت عرض أسهم هذه الشركات للبيع علي الجمهور الراغب في الشراء و كانت بداية تلك الأمثلة في انجلترا بإنشاء أول شركة مساهمة لتمويل سفينتين لاستكشاف شرق أوروبا.
يشرح الكاتب بشكل شمولي عن كل ما يخص البورصة موضحا تميز عوائد شراء الأسهم علي المدى الطويل مقارنة بشراء السندات الحكومية أو حتى ادخار الأموال .. بين ايضا النظريات المختلفة التي تعتمد عليها شراء الأسهم وكيفية انتقاء الأسهم الرابحة وانواع الأسهم وانواع شركات الاستثمار ذات راس المال المحدد والغير محدد وشركات التوظيف متغيرة راس المال وإدارة المحافظ المالية و الادوات المختلفة المستخدمة في البورصة مثل الضمانات والسندات المضمونة وغيرها وعمليات البيع الخيارية الآجلة .. تعرض أيضا لمؤشرات البورصة المختلفة في لندن والولايات المتحدة .
إن عمليات البيع والشراء تعتمد بشكل كبير على العقلانية والحدس الواقعي فيجب أن يكون المستثمر لديه القدرة علي التروي بشكل كبير وان يبني عمليتي الشراء والبيع ع استراتيجية منطقية بناءا علي اولا تحليل أساسي للأسهم يدرس فيه أحوال الشركة وسعر أسهمها ومدى الأرباح ومقارنة العوائد بالسنين الماضية والقاء نظرة متفحصة علي التقارير السنوية ومستوى الإدارة وثانيا تحليل فني يدرس فيه نمط تغير الاسهم على مدار العام الحالي والاعوام السابقة .
عملية شراء الأسهم تتطلب النظر إلي مجموعة من النسب منها نسبة بيتا وهو يقيس مستوى تغير أسهم الشركة عن السوق . نسبة السعر / الربح وهي من أهم النسب المستخدمة لمعرفة مدى النمو المتوقع .. اخيرا عوائد الاسهم .. وان يقارن بين مستوى الشركة والشركات الأخرى في نفس المجال ليتضح وضع هذه الأسهم ... وضح أيضا كيفية مراجعة سجلات الشركات للحصول علي الارقام وربطها ببعض والخروج لاستنتاج عن مدى كفاءة الادراة وما هو متوقع في المستقبل .. ينصح أيضا الكاتب بتوزيع الاستثمارات في شركات مختلفة حتى إذا حدث تراجع أو انهيار في إحدى الشركات يعوض ذلك باقي الاستثمارات في الشركات الأخرى وهو ما يقوم به مديرو الاستثمارات في شركات الاستثمار ذات الاستثمارات المجمعة ... استفدت كثيرا من الكتاب واعطاني صورة مجملة عن هذا العالم الكبير الذي نال منه البعض ثروات طائلة وآخرون وصلوا الي حافة الافلاس .

[MAHESH PANDEY · Rating 5 out of 5]

Great book for beginner (which I am).

Stock market terms are explained in very layman language along with the actual term which is used in day to day market.

Provides a good understanding of what and how market works and defines the whole vocabulary.

In addition, book also beautifully provides How to invest with the real world math formulas to perform calculation before actual investment can be done.

This book gave me a platform on top of which I can confidently build on.

[Michelle · Rating 3 out of 5]

This book provides great basics to people that want to understand or participate in the U.S. stock market. This information is important especially with the current market volatility and the ease that retail investors can access the market.

The book gives important facts. It does not have a narrative, nor did I find the flow easy to follow. It is for people that want this information and they don't need it packaged in an easy to read format.

Thank you Netgalley for the ARC

[Michael · Rating 2 out of 5]

I wasn't expecting much before reading this book, but yet I'm feeling a bit disappointed. The book covers a lot of topics related to the stock market but I found the content to be too high-level to be truly impactful and too detailed to be enjoyable. Overall it gave me the feeling that I was reading a dictionary or some kind of large glossary, which is - to be honest - rather unpleasant.

[Luba · Rating 4 out of 5]

This book is a great introduction to the stock market for those who know little about it. The author explains all the terms and basic concepts, goes through the various considerations you need to make when investing and helps you read financial pages in newspapers.

[Marissa Morrison · Rating 4 out of 5]

It contains investment guidelines that are too hands-on for my taste.

[Jorgen · Rating 3 out of 5]

Good, basic introduction to stock market finances. Just a note: this book is written from a British perspective, primarily focusing on the stock market in London.

[Ankit Dewan · Rating 4 out of 5]

Good to start book. Covers in depth definitions, but lacks practicality.

[Urim Shuku]

Blue chip companies - Blue chip being highest valued chip in poker are companies which are the largest and safest to invest in.

[Wassim · Rating 3 out of 5]

It's a good book in general it gives a brief idea about the investment in general and about UK market in specific .

[Haya · Rating 3 out of 5]

Good intro to the basics of investing. Easy to understand explanations of different options. Good advice on weighing up risk, benefit, & timelines.

[Enhee Tsoodol]

"Аливаа зөвлөгөөнд үл итгэх үзлээр хандах хэрэгтэй. Энэ номонд ч бас."

[Waleed · Rating 4 out of 5]

I thought this was a great initial introduction to the strange world of stocks. All I really knew about stocks before I read this book was that they were sold by companies and you could buy or sell them, but in my head they were very abstract objects.
Becket is very practical in the advice he gives and clearly lays out aspects of the stock market and different market instruments.
The one thing this book is perhaps missing is a basic explanation of what exactly happens when a trade is put forward and the mechanics of buying and selling, which I looked up myself afterwards but would have found useful when reading the book.
The gist is that the stock market is not a single godlike entity that surrounds the planet, but a series of different physical exchanges in different countries. The price can be different in each country and is determined by the last trade successfully transacted.

[Yousuf Habib · Rating 4 out of 5]

It was an awesome book that give me an useful information about stocks and bonds and broke the ice between me and the stock market exchange which i thought before reading the book that it was very complicated and depend on luck and speculation more than basic and scientific estimation
So the author (Micheal Becket) Grant me the enthusiasm to summarize his book read more books and take training and courses about it.

[Priyank Gala · Rating 5 out of 5]

best book for stocks

[Debashish Mohanty · Rating 5 out of 5]

It has a clear layout of stock, trading,debentures etc as the name suggests just gets you the insight and the trading terms in depth thats required. A must for everyone.