Security Analysis begins with an analysis of various stock market indexes and how they are weighted: equally weighted, price-weighted, and value or capitalization-weighted. The module moves on to various return calculation methods, and how to value securities with both equal and unequal cash flows. After completion of these calculations, students are taken through the key definitions of, and differences between, technical and fundamental analysis and the relationship of each to modern portfolio theory, and finally receive a walk-through of how to calculate a dividend growth rate for dividend paying stocks.

5–1 Explain terminology related to investment return computations, and calculate returns.
5–2 Calculate various measures of periodic returns or pricing of securities.
5–3 Explain terminology and concepts associated with fundamental and technical analysis.
5–4 Relate fundamental and technical analysis concepts to modern portfolio theory principles.
5–5 Appraise the relative attractiveness of investments during various interest rate and economic cycles.
5–6 Relate the impact of financial leverage to the financial performance of a company and to the valuation of a company’s stock.

Author: Craig Kinnunen, MS, CFP®

Craig Kinnunen, MS, CFP® is an associate professor at the College for Financial Planning. Prior to joining the College, Craig enjoyed a long and successful career in personal financial planning and wealth management. Craig’s enthusiasm for financial planning extends beyond the classroom, as he also spends time providing pro bono financial education and individual financial counseling to members of the Colorado National Guard. Craig earned a bachelor of science degree in accounting from Northern Michigan University and followed that up with a master of science degree in finance from the University of Colorado in Denver. You can contact Craig at craig.kinnunen@cffp.edu.

Complexity Level: Advanced