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| Foreword | |
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| Preface | |
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| Acknowledgments | |
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| The Verdict of History | |
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| Stock and Bond Returns Since 1802 | |
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| "Everybody Ought to Be Rich" | |
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| Financial Market Returns from 1802 | |
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| Historical Series on Bonds | |
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| The Price Level and Gold | |
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| Total Real Returns | |
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| Interpretation of Returns | |
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| Real Returns on Fixed-Income Assets | |
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| The Fall in Fixed-Income Returns | |
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| Equity Premium | |
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| International Returns | |
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| Conclusion | |
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| Stocks from 1802 to 1871 | |
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| Arithmetic and Geometric Returns | |
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| Risk, Return, and Portfolio Allocation | |
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| Measuring Risk and Return | |
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| Risk and Holding Period | |
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| Investor Holding Periods | |
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| Investor Returns from Market Peaks | |
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| Standard Measures of Risk | |
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| Correlation between Stock and Bond Returns | |
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| Efficient Frontiers | |
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| Recommended Portfolio Allocations | |
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| Inflation-Indexed Bonds | |
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| Conclusion | |
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| Stock Indexes | |
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| Market Averages | |
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| The Dow Jones Averages | |
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| Computation of the Dow Index | |
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| Value-Weighted Indexes | |
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| Worldwide Rank of Individual Firms | |
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| Transformation of S&P 500 Index | |
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| Return Biases in Stock Indexes | |
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| What Happened to the Original 12 Dow Jones Industrials? | |
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| The Impact of Taxes on Asset Returns | |
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| Historical Taxes on Income and Capital Gains | |
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| A Total After-Tax Returns Index | |
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| The Benefits of Deferring Capital Gains Taxes | |
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| Inflation and the Capital Gains Tax | |
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| Increasingly Favorable Tax Factors for Equities | |
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| Stocks or Bonds in Tax-Deferred Accounts? | |
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| Conclusion | |
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| History of the Tax Code | |
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| Perspectives on Stocks as Investments | |
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| Early Views of Stock Investing | |
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| Influence of Smith's Work | |
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| Common Stock Theory of Investment | |
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| A Radical Shift in Sentiment | |
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| Postcrash View of Stock Returns | |
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| The Cult of Equities | |
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| The Technology Boom | |
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| Legacy of the Bull Market | |
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| Valuation, Future Stock Returns, and Style Investing | |
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| Sources and Measures of Stock Market Value | |
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| An Evil Omen Returns | |
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| Valuation of Cash Flows from Stocks | |
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| Sources of Shareholder Value | |
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| Does the Value of Stocks Depend on Dividends or Earnings? | |
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| Long-Term Earnings Growth and Economic Growth | |
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| Historical Yardsticks for Valuing the Market | |
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| Earnings Definitions and Controversy | |
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| Book Value, Market Value, and Tobin's Q | |
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| Market Value Relative to GDP | |
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| The Fed Model of Market Valuation | |
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| What Do These Valuation Measures Show? | |
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| The Great Bull Market, the New Economy, the Age Wave, and Future Stock Returns | |
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| The New Economy and Earnings Growth | |
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| Corporate Profits and National Income | |
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| Profits in the New Economy | |
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| Factors Raising the Valuation Ratios | |
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| The Equity Premium | |
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| Future Equity Returns | |
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| Terrorism | |
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| The Age Wave | |
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| Solutions to the Age Wave Crisis | |
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| Conclusion | |
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| Large Stocks, Small Stocks, Value Stocks, Growth Stocks | |
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| Outperforming the Market | |
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| Risks and Returns in Small Stocks | |
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| Trends in Small Stock Returns | |
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| Value-Based Criteria | |
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| Value and Growth Stocks | |
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| Nature of Growth and Value Stocks | |
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| Dividend Yields | |
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| Distressed Firms | |
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| Initial Public Offerings | |
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| Investment Strategy | |
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| Valuation of Growth and Technology Stocks | |
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| The Nifty Fifty of the 1970s | |
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| Evaluation of Data | |
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| What Was the Right P-E Ratio to Pay for the Nifty Fifty? | |
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| Earnings Growth and Valuation | |
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| Returns of High and Low P-E Nifty Fifty Stocks | |
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| Justified P-E Ratios for Individual Stocks | |
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| Conclusion | |
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| Corporate Changes in the Nifty Fifty Stocks | |
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| Global Investing | |
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| Cycles in Foreign Markets | |
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| Diversification in World Markets | |
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| Hedging Foreign Exchange Risks | |
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| Hedging in the Short Run | |
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| The Emerging Market Crisis of 1998 | |
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| Aftermath of Crisis | |
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| Conclusion | |
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| Economic Environment of Investing | |
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| Gold, the Federal Reserve, and Inflation | |
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| Money and Prices | |
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| The Gold Standard | |
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| Establishment of the Federal Reserve | |
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| Fall of the Gold Standard | |
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| Postdevaluation Policy | |
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| Postgold Monetary Policy | |
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| The Federal Reserve and Money Creation | |
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| How the Fed Affects Interest Rates | |
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| Fed Policy Actions and Interest Rates | |
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| Stocks as Inflationary Hedges | |
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| Why Stocks Fail as a Short-Term Inflation Hedge | |
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| Fed Policy, the Business Cycle, and Government Spending | |
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| Inflation and the U.S. Tax Code | |
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| Conclusion | |
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| Stocks and the Business Cycle | |
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| Who Calls the Business Cycle? | |
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| Stock Returns around Business Cycle Turning Points | |
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| Gains through Timing the Business Cycle | |
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| How Hard Is It to Predict the Business Cycle? | |
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| Conclusion | |
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| World Events That Impact Financial Markets | |
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| September 11, 2001 | |
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| What Moves the Market? | |
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| Uncertainty and the Market | |
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| Democrats and Republicans | |
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| Stocks and War | |
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| Conclusion | |
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| Reactions of Financial Markets to Economic Data | |
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| Economic Data and the Market | |
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| Principles of Market Reaction | |
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| Information Content of Data Releases | |
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| Economic Growth and Stock Prices | |
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| The Employment Report | |
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| The Cycle of Announcements | |
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| Inflation Reports | |
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| Impact on Financial Markets | |
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| Central Bank Policy | |
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| Conclusion | |
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| Stock Fluctuations in the Short Run | |
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| Spiders, Cubes, Futures, and Options | |
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| Exchange-Traded Funds | |
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| Stock Index Futures | |
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| The Impact of Index Futures | |
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| Basics of Futures Markets | |
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| Index Arbitrage | |
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| Predicting the New York Open with Globex Trading | |
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| Double and Triple Witching | |
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| Margin and Leverage | |
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| Using ETFs or Futures | |
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| Comparing ETFs, Futures, and Index Mutual Funds | |
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| Index Options | |
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| Buying Index Options | |
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| Selling Index Options | |
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| Long-Term Trends and Stock Index Futures | |
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| Market Volatility | |
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| The Stock Market Crash of October 1987 | |
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| Causes of the Stock Market Crash | |
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| Exchange-Rate Policies | |
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| The Stock Market Crash and the Futures Market | |
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| Circuit Breakers | |
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| The Nature of Market Volatility | |
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| Historical Trends of Stock Volatility | |
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| VIX: The Volatility Index | |
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| Distribution of Large Daily Changes | |
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| The Economics of Market Volatility | |
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| Epilogue to the Crash | |
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| Technical Analysis and Investing with the Trend | |
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| The Nature of Technical Analysis | |
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| Charles Dow, Technical Analyst | |
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| Randomness of Stock Prices | |
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| Simulations of Random Stock Prices | |
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| Trending Markets and Price Reversals | |
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| Moving Averages | |
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| Testing the Dow Jones Moving-Average Strategy | |
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| The Nasdaq Moving-Average Strategy | |
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| Distribution of Gains and Losses | |
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| Conclusion | |
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| Calendar Anomalies | |
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| The January Effect | |
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| Causes of the January Effect | |
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| The January Effect in Value Stocks | |
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| Monthly Returns | |
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| The September Effect | |
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| Intramonth Returns | |
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| Day-of-the-Week Effects | |
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| What's an Investor to Do? | |
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| Behavioral Finance and the Psychology of Investing | |
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| Technology Boom, 1999-2001 | |
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| Behavioral Finance | |
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| Building Wealth Through Stocks | |
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| Fund Performance, Indexing, and Beating the Market | |
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| Performance of Equity Mutual Funds | |
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| Finding Skilled Money Managers | |
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| Reasons for Underperformance of Managed Money | |
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| A Little Learning Is a Dangerous Thing | |
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| Profiting from Informed Trading | |
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| How Costs Affect Returns | |
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| Development of Indexing and Passive Investing | |
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| Potential Pitfalls of Indexing | |
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| Effect of Overpricing on Returns | |
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| Effects of Overpricing on Portfolio Allocation | |
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| Conclusion | |
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| Structuring a Portfolio for Long-Term Growth | |
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| Principles of Long-Term Investing | |
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| Return-Enhancing Strategies | |
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| Implement the Plan and the Role of an Investment Advisor | |
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| Conclusion | |
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| Index | |