Reading the Financial Pages for Dummies®

Chapter 2. Looking at How the Financial Pages Work

In This Chapter

• Understanding what the numbers mean

• Assessing what the numbers can't tell you

• Reading news stories

Your intensive search for an investment generally starts with the numbers. No matter how good a company may look from the things you've already read in your newspaper, you're not going to be interested in actually laying down your hard-earned cash unless the underlying figures stack up properly. Okay, you may be prepared to make a few allowances now and then, such as accepting that a struggling company with a bad record may have good prospects if it can only get the better of its debts. Or you may think that a famous-name chief executive can transform your chosen company's fortunes with her incisive management skills. But only a fool ever lays down her money without examining the financial fundamentals first.

In this chapter I talk mostly about the stock market, because that's the main place where you're likely to want to take things into your own hands and begin acting on your own account. If you're experienced enough to be able to use the information in your paper about government bonds, investment trusts, currency exchange rates, and the price of oil and copper, then good luck to you. I discuss those things in more detail in Part III, because they have separate lives of their own that don't mesh too well with the world of the stock market. Here, I keep things simple and focus solely on shares.

Getting the Most out of the ...