Now you can learn the 12 golden rules of investing success. This is something that all most anyone can learn and apply to achieve greater financial security. Start with the basics and learn all the rules followed by successful investors. You can do this. The presentation is available for purchase from Scribd https://www.scribd.com/doc/241726833/The-12-Golden-Rules-of-Investing

1. Part
of
the
Common
Sense
Investor
Series
Investing Basics
12 rules for
successful stock
investing
Saunders Learning Group, Newton, KS Oct. 2014

2. Saunders
Learning
Group
provides
a
variety
of
training
programs,
workshops
and
seminars
targeted
to
the
financial
services
industry.
Programs
are
available
in
a
wide
range
of
topics,
and
we
are
specialists
in
developing
custom
programs
that
are
targeted
to
your
needs.
This
presentaBon
is
available
for
purchase:
Buy
from
Scribd
Contact
the
founder,
Floyd
Saunders
at
316-­‐680-­‐6482
or
at
floyd@floydsaunders.com
for
more
informaBon.
Saunders Learning Group, Newton, KS
2
Training from Saunders Learning Group

3. No risk of
losing money
No opportunity to
earn money
Your top enemy is
INFLATION
Saunders Learning Group, Newton, KS
INVESTING
There is risk of
losing money
There is opportunity to
earn money
Your top enemy is
YOURSELF
SAVING

4. WHY SHOULD YOU INVEST?
Investments
Sound and profitable investment product
- No need for a “boss” nor to have “customers”
Time to let your money grow
- No need to “go to work” nor “manage people”
PASSIVE INCOME
Saunders Learning Group, Newton, KS

5. 3 THINGS YOU NEED
TO START INVESTING
Money To Invest
Stable Finances
Knowledge on
Investments
Saunders Learning Group, Newton, KS

6. MONEY TO INVEST
A regular savings plan
Reduce expenses
Generate more cashflow
Saunders Learning Group, Newton, KS

7. STABLE FINANCES
A consistent budget plan
Absence of bad debts
An emergency fund
Saunders Learning Group, Newton, KS

8. KNOWLEDGE ON INVESTMENTS
Attend “money” seminars
Self-study on investments
Learn from experience
Saunders Learning Group, Newton, KS

9. Basics of
Investing in
Stocks
Saunders Learning Group, Newton, KS
9

10. Economic Analysis
Involves assessing economic conditions that can affect a firm’s stock price
Economic growth:
A measure of growth in a country’s
economy over a particular period
Gross domestic product (GDP):
The total market value of all products
and services produced in a country
Weak economic conditions
! Lowers demand and stock prices
! Consumers spend less, further
lowering demand
Fiscal policy
The means by which the U.S. government
imposes taxes on individuals and
corporations and by which it spends its
money
Interest rates
" Stocks perform better when interest
rates are low
" Some stocks are more sensitive to
interest rates than others
" The Federal Reserve uses monetary
policy to influence interest rates
Inflation
The increase in the general level of prices of
products and services over a specified period
" Consumer price index (CPI): a measure of
inflation that represents prices of various
consumer products
" Producer price index (PPI): a measure of
inflation that represents prices of products
used to produce other products
Saunders Learning Group, Newton, KS 14-10

11. Sources for Economic Analysis
Saunders Learning Group, Newton, KS 14-11

12. Evaluating Stocks
The Internet
• Most corporations
have their own Web
sites.
• The information may
be more detailed
than material from
the corporation’s
printed publications.
• You can also use
search engines to
find information
about investing in
stocks.
General financial
news
• Specific information
about a company
and its stock’s
performance
Saunders Learning Group, Newton, KS
Stock Advisory
Services
• Contains information
about stock prices and
capitalization,
earnings, and dividends
• Provides a detailed
description of the
company’s major
operations
• Offers current
information about net
income and sales
revenue
Corporate News
Publications
• Annual and quarterly
reports offer:
• A summary of a
corporation’s
activities
• Detailed financial
information
• You do not have to be
a stockholder to get an
annual report. You can
also get information
about specific
companies from
financial publications

13. Analysis of the Firm
Firm-specific characteristics - Analysis of a firm’s income statement and balance sheet can reveal the following characteristics:
Liquidity
• Current ratio
The ratio of a firm’s
short-term assets to
its short-term
liabilities
• Show the firm’s
ability to cover
expenses
Financial leverage
• Debt ratio
A measure of
financial leverage
that measures the
proportion of total
assets financed
with debt
• Times interest
earned ratio
A measure of
financial leverage
that measures the
ratio of the firm’s
earnings before
interest and taxes
to its total interest
payments
Efficiency
• Inventory turnover
A measure of
efficiency;
computed as the
cost of goods sold
divided by average
daily inventory
• Average collection
period A measure of
efficiency;
computed as
accounts receivable
divided by average
daily sales
• Asset turnover ratio
A measure of
efficiency;
computed as sales
divided by average
total assets
Saunders Learning Group, Newton, KS 14-13
Profitability
• Operating profit
margin A firm’s
operating profit
divided by sales
• Net profit margin
A measure of net
profit as a
percentage of sales
• Return on assets
A measure of
profitability;
computed as net
profit divided by
total assets
• Return on equity
A measure of
profitability;
computed as net
profit divided by
stockholder’s equity

14. Financial Ratios Used to Evaluate a Business
Saunders Learning Group, Newton, KS 14-14

15. Evaluating Stocks
To find out about the health of a corporation, you can use numerical measures such as:
Current Yield
• The annual dividend of an investment divided by the current market value
Total Return
• A calculation that includes the annual dividend as well as any increase or decrease in the
original purchase price of the investment
Earnings Per Share
• A corporation’s net, or after-tax, earnings divided by the number of outstanding shares of
common stock
• Measures the amount of corporate profit assigned to each share of common stock
• Gives a stockholder an idea of a company’s profitability, an increase in earnings per share is
a good sign for stockholders.
Price-earnings (PE) ratio
• The price of one share of stock over the last 12 months
• Used to compare the corporate earnings to the market price of a corporation’s stock.
• Study the price-earnings ratio for a corporation over a period of time so that you can see a
range.
Industry Norms, Go
to:
h(p://biz.yahoo.com/research/indgrp
Provides
informa<on
on
various
industry
groups
and
financial
informa<on
on
firms
you
specify
in
any
industry.
Saunders Learning Group, Newton, KS

16. Analysis of the Firm
Saunders Learning Group, Newton, KS 14-16

17. Investing in Stocks Rule #1
Saunders Learning Group, Newton, KS
17
#1
Start
with
an
emergency
fund
You
should
have
three
to
six
months
of
emergency
savings.
But
start
with
a
$1,000
goal
or
$19
per
week
for
a
year.
You
can
do
that.

18. Investing in Stocks Rule #2
Open
a
“cash”
only
account
with
a
stock
broker
–
Online,
Discount,
Full-­‐Service
Save
the
margin
account
for
later,
a]er
you
know
more
about
what
you
are
doing
# New
investor,
need
advise
–
Use
a
full
service
brokerage
for
guidance,
check
for
a
good
track
record
# More
experienced
–
Use
a
discount
brokerage
with
good
service
and
quality
products
Saunders Learning Group, Newton, KS
18

19. Investing in Stocks Rule #3
Start
with
$1,000
in
an
index
mutual
fund
$5,000
buy
just
two
to
three
stocks;
$10,000
add
one
or
two
addiBonal
stocks;
$25,000
allows
you
have
five
or
six
stocks;
$100,000
Not
more
than
20
stocks
Saunders Learning Group, Newton, KS
19

20. Index Funds with no commissions
and lower fees
Saunders Learning Group, Newton, KS 20

21. Investing in Stocks Rule # 4
Buy
the
very
best
companies,
concentrate
on
a
limited
number
of
stocks
with
growing
dividends,
and
watch
them
closely
using
stock
alerts.
Saunders Learning Group, Newton, KS
21

22. Buy Stocks with Growing Dividends
! Link
to
Dividend
Aristocrats
Companies that have increased dividends for at least 25 straight years.
This narrows your search to about 50 U.S. companies.
Saunders Learning Group, Newton, KS
22

23. Investing in Stocks Rule #5
Cut
loses
on
stocks
@
8%
with
Stop
Lost
orders
Saunders Learning Group, Newton, KS
23
$
This
takes
out
the
hope
and
fear
of
invesBng,
makes
for
raBonal
decision
making
$
Be
persistent
about
cueng
loses,
so
you
have
money
to
invest
in
the
next
best
opBon

24. Investing in Stocks Rule #6
Sell
your
best
stocks
with
25
to
30%
gains.
Follow
the
basic
rule,
Buy
low,
Sell
High.
Always
sell
you
worst-­‐performing
stocks
first,
not
your
best,
but
don’t
hang
on
for
the
last
ounce
of
gains.
Saunders Learning Group, Newton, KS
24

25. Investing in Stocks Rule #7
Pick
Market
leaders
in
areas
you
have
some
knowledge
" Have sales and earnings per share grown strongly over the past 3 years?
" Have sales and earnings per share growth accelerated in recent quarters?
" Be on the alert for cost reductions and layoffs that may enhance short-term
Saunders Learning Group, Newton, KS
25
performance at the expense of long-term growth.
" Look for sustainable competitive advantage and strong growth prospects.
" Does the company have a competitive edge? Examine their products or
services.
" Do they have better technology; stronger brands; copyrights or patents.
" Or greater expertise; that gives them an advantage over competitors?

26. Stock Screener tools
$
Use
a
stock
screener
from
Morningstar.com,
or
any
of
the
financial
web
sites
Saunders Learning Group, Newton, KS
$
Profits
drive
the
price
of
stocks:
improving
earnings
(EPS),
growing
profits,
increasing
sales
and
earnings
growth
$
#1
in
their
category
with
strong
Return
on
Equity
(ROE)
26

27. Investing in Stocks Rule #8
Invest
dollars,
not
number
of
shares.
Pick
stocks
with
a
price
between
$15
and
$150
per
share
$ 70%
of
trades
are
with
insBtuBonal
investors,
who
drive
the
market
and
shun
low
priced
stocks
Saunders Learning Group, Newton, KS
27
VS.

28. Investing in Stocks Rule #9
Use
fundamental
analysis
for
picking
stocks
to
own
and
technical
analysis
to
know
the
buy
and
sell
signals.
Saunders Learning Group, Newton, KS
28

29. Technical Analysis
! Technical
analysis
is
reading
a
stock’s
prices
and
trading
volume
to
Bme
the
buying
and
selling
of
stocks.
Look
for
price
correcBons
and
base
building
in
charts.
Saunders Learning Group, Newton, KS
29

30. Investing in Stocks Rule #10
Earnings
Per
Share
of
30%
or
more
Over
Bme
3
of
4
of
the
biggest
winners
are
growth
stocks
with
EPS
of
30%
or
more
Saunders Learning Group, Newton, KS
30

31. Investing in Stocks Rule #11
Buy
leaders
$ Sales
up
25%
and
gains
of
25%
in
the
same
quarter
from
a
year
earlier
$ #1
in
their
field
for
recent
sales,
earning
growth,
profit
margins
and
ROE
(20%
or
more)
$ Also
look
for
strong
management
team
and
management
ownership
with
strong
insBtuBonal
ownership
Saunders Learning Group, Newton, KS
31

32. Investing in Stocks Rule #12
Look
for
stocks
with
a
strong
record
of
annually
increasing
dividends
Saunders Learning Group, Newton, KS
32
Link to list of companies with record or annually increasing dividends:
http://www.dividend.com/dividend-stocks/25-year-dividend-increasing-stocks.php

33. Questions
This presentation is available for purchase: Buy from Scribd
Saunders Learning Group, Newton, KS

34. Reference Material
Saunders Learning Group, Newton, KS
Figuring Out Wall Street Consumer’s Guide To
Financial Markets
By Floyd Saunders
Publisher: Saunders Learning Group
ISBN: 978-0-9824019-0-3
available from Amazon, B&N, and http://
www.figuringout wallstreet.com
or www.floydsaunders.com
Book summary: From bank failures to home foreclosures and panic
around the world, Figuring Out Wall Street, is the concise guide to help
everyone understand how this latest crisis happened, who was responsible and
what to do now to restore our financial systems. Written in an easy to
understand manner, even the most complex financial concepts are easy to
digest. This book provides help to monitor investments with a review of
investment products, financial regulators and economic indicators. Learn how
the stock market exchanges work and the world of investment banking, hedge
funds, venture capital and private equity. Every chapter includes action plans
for investing.

35. You are welcome to use this
presentation
! If
you
provide
training
in
inves<ng
or
money
management
as
trainer,
or
professional
in
the
financial
services
industry,
you
might
be
interested
in
purchasing
this
presenta<on
for
your
own
training
purposes.
! Presenta<ons
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Sense
Investors
Series
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You
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make
any
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to
fit
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into
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organiza<on
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programs.
! Use
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find
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Scribd:
Saunders Learning Group, Newton, KS
Buy
from
Scribd
35

36. About the Author
Saunders Learning Group, Newton, KS
! Floyd
Saunders
has
worked
on
Wall
Street
with
both
Bank
of
America
and
JPMorgan,
where
is
was
a
vice
president
in
global
financial
systems.
He
has
worked
across
the
industry
in
retail,
commercial,
and
investment
banking.
! He
has
taught
courses
in
Money
and
Banking
and
extensively
for
the
American
Ins<tute
of
Banking
and
various
colleges.
! As
a
consultant,
he
developed
and
taught
a
wide
range
of
banking
and
inves<ng
courses.
!
He
authored
three
programs
for
the
American
Bankers
Associa<on:
Banking
on
Mutual
Funds
and
Annui1es,
Introduc1on
to
Securi1es
Markets
and
Inves1ng
in
Securi1es.
date