Financial Theory Articles

Learn about different investment strategies and how to pick the right one for you.

Learn how the writings of John Burr Williams and Harry Markowitz led to the creation of the investment portfolio.

Get the full story on this asset class before you write it off as too risky.

Learn about the tools the Fed uses to influence interest rates and general economic conditions.

Discover the methods behind financial forecasts and the risks inherent when we seek to predict the future.

Find out how a cat and a ladybug prove markets are both random and efficient.

Learn about what is being dubbed the low-volatility anomaly, why it exists and what we can learn from it.

The method of identifying cost basis can help you to get the most out of reduced tax rates.

How a company pays in a merger or acquisition can reveal a lot about the buyer and seller. We tell you what to look for.

Can you really trust what the financial services industry puts out? We tell about some tricks that hide the truth.

Don't get swindled into buying snake oil from Wall Street. Find out three lies that can lead to losing investments.

Strategic acquisition is becoming a part of doing business. Discover the different types of investor groups involved.

We give you four equations to help figure out the yields on your investments.

The Options Industry Council is an educational organization for options traders. We introduce you to the Council and the online tools available.

There are alternatives to national currencies. Discover complementary currencies and how they work.

Without this risk-reduction technique, your chance of loss will be unnecessarily high.

These fallacies have hounded free market economists since the days of Adam Smith.

A disciplined rebalancing practice can add a lot of value to a long-term strategic asset allocation program.

Learn how to figure out how two stocks might move together in the future by calculating covariance.

Insider trading use to be profitable, but can it be today? Learn if investors should be paying attention to insiders.

Banks are a part of ancient history. Find out how this system of money management developed into what we know today.

What is the difference between a standard of living and quality of life? Find out in this breakdown.

Curious about how emotions and biases affect the market? Find some useful insight here.

These lessons from Icahn, Buffett, Slim and others will help you with your portfolio and trading style.

Socially responsible investing allows you to express your political views in an unlikely way.

Cash flow analysis is a critical process for both companies and investors. Find out what you need to know about it.

Whether up, down or sideways, learn about some of the factors that drive stock market moves.

How can the presidential election affect your portfolio? Find out here.

Check out the history and inner workings of the world's six most well-known stock exchanges.

Find out how this ratio can help you evaluate companies and make investment decisions.

Speculators often get a bad rap, but it's important to remember that they only observe trends, not manipulate them.

Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.

Before you tackle this challenge, know the challenges of forming and operating an official nonprofit organization.

Understanding gender differences and how they are changing over time is fundamental to understanding the investing world.

The Misery Index measures a combination of unemployment and inflation, but what does it mean for your finances?

A high-risk security can reduce risk overall. Find out how it works.

They know more about stocks than the average person, but analysts are still affected by biases. Find out what they are.

Risk is inseparable from return. Learn more about these measures and how to balance them.

Unlike a funded loan, the exposure from a credit derivative is complicated. Find out everything you need to know about counterparty risk.

We take a closer look at the theories that attempt to explain and influence the market.

Genetic algorithms are unique ways to solve complex problems by harnessing the power of nature.

Using this method, investors should be able to focus on a company's advantages and vulnerabilities.

Learn about institutional investing and all of the major players in this field.

These decision-making tools play an integral role in corporate finance and economic forecasting.

Know your odds before you put your money on the table.

Like most allegedly sure-fire methods in the investment industry, this one has its flaws too.

Fundamental trends are an important driver of financial markets and every investor and entrepreneur should analyze them.

Private equity investing is becoming more accessible for individual investors; find out how you can get involved.

Learn how to follow the efficient frontier to increase your chances of successful investing.

How much are your investments actually returning? Find out why the method of calculation matters.

A merger and acquisition advisor is often the best choice when selling a company.

If you're an investor who likes to understand how and why your investment products work, this article is for you!

Frustrated stock pickers rejoice - asset class selection is simpler and safer.

Learn the main principles that Warren Buffet uses in assessing a company. His take on value investing may surprise you.

These five performance ratios will help you measure how good your money manager is at increasing the value of your portfolio.

In theory, PPP stands up much better than it does in reality. Find out how to evaluate currencies according to the price of a Big Mac.

A solid understanding of economics helps build a strong foundation in almost every area of life.

There's a fine line between staying informed and being overloaded with financial information.

Learn the differences between these closely related disciplines and how they inform and influence each other.

When trying to evaluate a company, it always comes down to determining the value of the free cash flows and discounting them to today.

Climate-change deniers and believers alike would be wise to prepare for the worst.

Fixed-income investments can be part of your portfolio at any age. Find out how.

Find out how the first market averages were calculated and what they mean for investors today.

Make your deadlines for required minimum distributions and save more of your nest egg.

Learn how to spot over-diversification in your portfolio and find out why some financial advisors are motivated to do it.

Sometimes your largest financial hurdle is our head. Learn about the common mind-traps that trip up investors.

Learn about the man who mentored Warren Buffett, who eventually became the investing "Oracle of Omaha".

See how people's movements, ages, deaths and buying patterns affect portfolios worldwide.

These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet.

The DDM is one of the most foundational of financial theories, but it's only as good as its assumptions.

Hyperinflation isn't some historical curiosity. It is a very real risk that countries and governments still struggle with today.

These world-changing events are rare and difficult to predict, but the implications for your investments need to be taken seriously.

Find out how legislation enacted in 2003 is benefiting both investors and corporations, and when it's scheduled to expire.

Learn about the price-volatility dynamic and its dual effect on option positions.

Sokol contrasts sharply with Buffett's management style, but he can help Berkshire thrive once Buffett decides to move on.

The required rate of return is used by investors and corporations to evaluate investments. Find out how to calculate it.

These rules are in place to protect consumers and help businesses thrive at the same time.

Find out more about the fraudulent accounting methods some companies use to fool investors.

Learn what this phrase means and how to spot it in a company's financial statements.

We look at how corporate boards are constructed, and how investors can get involved.

On May 6, 2010, the DJIA plunged 998.5 points in twenty minutes. Find out more about what happened that day.

Learn why this ratio may be a good alternative to the current, cash and quick ratios.

Why have stocks historically produced higher returns than bonds? It's all a matter of risk.

Understanding interest rates helps you answer the fundamental question of where to put your money.

Reports from the Securities and Exchange Commission provide investors with an edge in determining the investment value of companies. Learn what to look for in these financial reports.

Determining monthly contributions to college funds, retirement plans or savings is easy with this calculation.

This growing industry is full of opportunities for the socially conscious investor.

Unfortunately, there is no perfect investment strategy that will guarantee success, but you can find the indicators and strategies that will work best for your position.

Though they're unpredictable and heavily contested, market anomalies can often work in an investor's favor.

The SEC has continued to make the market a safer place and to learn from and adapt to new scandals and crises.

Learn the strengths and weaknesses of passive and active management when trying to uncover the overall market's worth.

One of the most serious problems facing the general investing public is that that they fail to learn enough about investments until/unless they go wrong.

Deciding whether it's possible to attain above-average returns requires an understanding of EMH.

We look at how the FDA affects the pharmaceutical industry, and how investors can avoid the pitfalls.

Make sure you buy in low to ride this phenomenon for all it's worth.

Do you have a capital loss that could be booked and used to offset future tax liabilities? If so, it may be time to sell.

The Basel III regulations mark a drastic reform in international banking. But how do they impact the future's investment landscape?