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The easy-to-use resource for anyone looking to learn more about the financial sector and how to make the most of it The Fisher Investments On series is designed to provide individual investors, students, and aspiring investment professionals with the tools necessary to understand and analyze investment opportunities—primarily for investing in global stocks. Each guide is an easily accessible primer to economic sectors, regions, or other components of the global stock market. While this guide is specifically on Financials, the basic investment methodology is applicable for analyzing any global sector, regardless of the current macroeconomic environment.Following a top-down approach to investing, Fisher Investments on Financials can help you make more informed decisions within the Financials sector. It skillfully addresses how to determine optimal times to invest in Financials stocks and which Financials industries have the potential to perform well in various environments. The book is divided into three comprehensive parts—Getting Started, Financials Details, and Thinking Like a Portfolio Manager. Explains some of the sector's key macro drivers—like regulation, interest rates, and credit trendsShows how to capitalize on a wide array of macro conditions and industry-specific features to help you form an opinion on each of the industries within the sectorTakes you through the major components of the industries within the global Financials sector and reveals how they operateOffers investment strategies to help you determine when and how to overweight specific industries within the sectorOutlines a five-step process to help differentiate firms in this field—designed to help you identify those with the greatest probability of outperformingFilled with in-depth insights, Fisher Investments on Financials provides a framework for understanding this sector and its industries to help you make better investment decisions—now and in the future. With this book as your guide, you can gain a global perspective of the Financials sector and discover strategies to help achieve your investing goals.
JARRED J. KRIZ has been in the financial ser-vices industry since 1997, with experience in the banking, investment banking, brokerage, and asset management fields. He regularly presents to audiences at investing workshops across the country and currently works as a Senior Capital Markets Research Analyst at Fisher Investments with a focus on the Financials sector and macroeconomic strategy.
Foreword ixPreface xiAcknowledgments xvPart I Introduction 1Chapter 1 Financials Basics 3Financials 101 4Financials Sector Breakdown 23Part II Industry Group Details 31Chapter 2 Banks 33Banks 101 34Types of Banks 45Banks Industry Group Characteristics 48Bank Regulation 53Chapter 3 Diversified Financials 63Capital Markets 64Consumer Finance 76Diversified Financial Services 80Chapter 4 Insurance Industry Group 83Characteristics of Insurers 84How Do Insurance Companies Make Money? 89How Do Insurance Companies Act? 94Regulation 98Chapter 5 Real Estate Industry Group 103What Is a REIT? 105REIT Characteristics 108A Representative Example: Annaly Capital Management 112Equity REIT Sub-Industries 115Unique Measurements for REITs 118Part III Thinking Like a Portfolio Manager 121Chapter 6 The Top-Down Method 123Investing Is a Science 123The Top-Down Method 126Top-Down Deconstructed 131Managing Against a Financials Benchmark 139Chapter 7 Security Analysis 143Make Your Selection 144A Five-Step Process 145Financials Analysis 153Chapter 8 Financials Investing Strategies 159Adding Value at the Sector Level 160Adding Value at the Country or Industry Level 161Adding Value at the Security Level 162Appendix A: Reference Material 165Appendix B: Derivatives 171Appendix C: Risk-Adjusted Balance Sheet 175Notes 179About the Author 185Index 187