BARRON'S

Finance

& Investment

Handbook

Ninth Edition

John Downes, A.B. Coauthor, Beating the Dow Freelance Financial Writer

FormerVice President, AVCO Financial Services, Inc. City of New York, Office of the Mayor, Office for Economic Development

Jordan Elliot Goodman, A.B., M.A. Author, Master YourDebt

Author, Master YourMoney Type Author, Everyone's Money Book

Host, Answers Radio Showon www.VoiceAmerica.com Creator of Moneyanswers.com Website

Former Financial Commentator, Marketplace Morning Report Former Wall Street Correspondent, MONEY Magazine, Time Warner Inc.

Former Financial Commentator, NBC News at Sunrise

CONTENTS

Page Acknowledgments vi Preface to the Ninth Edition ix /low to Use This Handbook Effectively xiv

PART I HOW TO INVEST YOUR MONEY: 30 KEY PERSONAL INVESTMENT OPPORTUNITIES

Introduction 3 Personal Investments at a Glance 6

Annuity 9 Bond, Corporate (Interest-Bearing) 12 Closed-End Fund 15 Collectibles 17 Common Stock 20 Convertible Security 22 Exchange-Traded Funds 25 Foreign Stocks and Bonds 28 Futures Contract on a Commodity 32 Futures Contract on an Interest Rate 34 Futures Contract on a Stock Index 36 Government Agency Security 38 Life Insurance (Cash Value) 40 Money Market Fund 43 Mortgage-B acked (Pass-Through) Security 46 Municipal Security 50 Mutual Funds (Open End) 53 Option Contract (Put or Call) 57 Option Contract on a Futures Contract (Futures Option) 61 Option Contract on an Interest Rate (Debt Option) 63 Option Contract on a Stock Index 65 Option Contract or Futures Contract on a Currency 67 Precious Metals 69 Preferred Stock (Nonconvertible) 72 Real Estate Investment Trust (REIT and FREIT) 75 Real Estate, Physical 78 Savings Alternatives 81 Treasury Securities (Bills, Bonds, and Notes) 85 Unit Investment Trust 88 Zero-Coupon Security 91

iv Contents

PART II HOW TO READ AN ANNUAL REPORT

How to Read an Annual Report 97 How to Read a Quarterly Report 128

PART III UNDERSTANDING THE FINANCIAL NEWS

Understanding the Financial News 131 How to Read Ticker Tapes 173

PART IV DICTIONARY OF FINANCE AND INVESTMENT TERMS

How to Use This Dictionary Effectively 178 Dictionary of Finance and Investment 179

PART V FINANCE AND INVESTMENT READY REFERENCE

Introduction 870

1. Sources of Information and Assistance 871 Federal Regulatory Organization in the United States

and Canada 871 U.S. State Attorneys General Offices 876 U.S. State Banking Regulators 880 U.S. State Insurance Regulators 884 U.S. State Securities Regulators 888 Canadian Provincial Agencies 893 Finance and Investment Organizations 895 Finance and Investment Publications 904 Databases, Software, and Online Services for Investing

and Financial Flanning 916 Online Services for Investing and Financial Flanning 917 Investment Websites 920

2. Major Financial Institutions 923 Federal Reserve Banks 923 Primary Government Securities Dealers 926 Federal Home Loan Banks 928 Commercial Banks 930 Canadian Banks 936 Thrift Institutions 937 Canadian Trusts and Loans 944 Life Insurance Companies 946 Brokerage Firms 953 Accounting Firms 959 Securities and Derivatives Exchanges Around the World 961

3. Mutual Funds and ETFs 967

Contents v

4. Historical Data 1011 NYSE/ARCA Composite 1012 Bond Buyer Index (20 Bonds) 1013 Dow Jones Industrial Average 1016 Dow Jones Transportation Stock Average 1019 Dow Jones Utility Average 1023 Dow Jones Composite Average 1026 Gold (London Afternoon Fix Price) 1028 Nasdaq Composite Index 1029 NYSE Composite Index 1031 S&P 500 Stock Index 1032 S&P/TSX Composite Index 1035 Treasury Bill (3-Month) Yields 1036 Treasury Bond (10-Year) Yields 1037 Wilshire 5000 Total Market 1039 Consumer Price Index 1040 Discount Rate 1041 Federal Funds Rate 1044 Index of Leading Economic Indicators 1046 Money Supply (M-l) 1048

Prime Rate 1050 Producer Price Index 1051 Unemployment Rate (Civilian) 1053

5. Publicly Traded Companies 1055 New York Stock Exchange 500 1057 Nasdaq 100 1092

APPENDIX

Selected Further Reading 1103 Currencies of the World 1111 Abbreviations and Acronyms 1117

Index 1141