Financial Theory Articles

  1. An Introduction To Complementary Currencies

    There are alternatives to national currencies. Discover complementary currencies and how they work.
  2. The Importance Of Diversification

    Without this risk-reduction technique, your chance of loss will be unnecessarily high.
  3. 4 Misconceptions About Free Markets

    These fallacies have hounded free market economists since the days of Adam Smith.
  4. The Role Of Rebalancing

    A disciplined rebalancing practice can add a lot of value to a long-term strategic asset allocation program.
  5. 4 Other Wall Street Protests You've Never Heard Of

    We look at some past Wall Street protests and explain why Occupy Wall Street is quite different.
  6. The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  7. Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.
  8. An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  9. 6 Rules From 6 Of The World's Top Investors

    These lessons from Icahn, Buffett, Slim and others will help you with your portfolio and trading style.
  10. Change The World One Investment At A Time

    Socially responsible investing allows you to express your political views in an unlikely way.
  11. Cash Flow From Investing

    Cash flow analysis is a critical process for both companies and investors. Find out what you need to know about it.
  12. 4 Biases That Can Make You A Bad Investor

    Find out how to spot these four biases, and start making more logical investing decisions.
  13. The Market And Presidential Promises

    How can the presidential election affect your portfolio? Find out here.
  14. Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
  15. Analyzing The Price-To-Cash-Flow Ratio

    Find out how this ratio can help you evaluate companies and make investment decisions.
  16. FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  17. Market Speculators: More Help Than Harm

    Speculators often get a bad rap, but it's important to remember that they only observe trends, not manipulate them.
  18. 5 Steps To Forming A Tax-Exempt Nonprofit Corporation

    Before you tackle this challenge, know the challenges of forming and operating an official nonprofit organization.
  19. The Misery Index: Measuring Your Misfortune

    The Misery Index measures a combination of unemployment and inflation, but what does it mean for your finances?
  20. Make Your Portfolio Safer With Risky Investments

    A high-risk security can reduce risk overall. Find out how it works.
  21. 5 Mental Mistakes That Affect Stock Analysts

    They know more about stocks than the average person, but analysts are still affected by biases. Find out what they are.
  22. The Viability Of Tracking Insiders

    Insider trading use to be profitable, but can it be today? Learn if investors should be paying attention to insiders.
  23. Measuring And Managing Investment Risk

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

    Unlike a funded loan, the exposure from a credit derivative is complicated. Find out everything you need to know about counterparty risk.
  25. Using Genetic Algorithms To Forecast Financial Markets

    Genetic algorithms are unique ways to solve complex problems by harnessing the power of nature.
  26. Evaluate Your Investments With SWOT Analysis

    Using this method, investors should be able to focus on a company's advantages and vulnerabilities.
  27. Betting On The Economy: What Are The Odds?

    Wondering what the odds of a default, recovery or new taxes are? Check out our take.
  28. Using Decision Trees In Finance

    These decision-making tools play an integral role in corporate finance and economic forecasting.
  29. Using Logic To Examine Risk

    Know your odds before you put your money on the table.
  30. The Flaws Of Using Mass Sentiment To Be Contrarian

    Like most allegedly sure-fire methods in the investment industry, this one has its flaws too.
  31. Profit By Understanding Fundamental Trends

    Fundamental trends are an important driver of financial markets and every investor and entrepreneur should analyze them.
  32. A Primer On Private Equity

    Private equity investing is becoming more accessible for individual investors; find out how you can get involved.
  33. Find The Highest Returns With The Sharpe Ratio

    Learn how to follow the efficient frontier to increase your chances of successful investing.
  34. How To Calculate Your Investment Return

    How much are your investments actually returning? Find out why the method of calculation matters.
  35. Owners Can Be Deal Killers In M&A

    A merger and acquisition advisor is often the best choice when selling a company.
  36. Do Small Investors Move The Market?

    As trading technology improves access, individual investors may have more of a say in the direction of the market.
  37. Diversification: It's All About (Asset) Class

    Frustrated stock pickers rejoice - asset class selection is simpler and safer.
  38. What Is Warren Buffett's Investing Style?

    Learn the main principles that Warren Buffet uses in assessing a company. His take on value investing may surprise you.
  39. Hamburger Economics: The Big Mac Index

    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.
  40. 5 Economic Concepts Consumers Need To Know

    A solid understanding of economics helps build a strong foundation in almost every area of life.
  41. The S&P Downgrade: What Does It Mean?

    Standard & Poor's downgraded the outlook on U.S. Treasuries from "stable" to "negative." We'll look at what this means for investors.
  42. 7 Facts You Didn't Know About The Greenback

    There's more to that $10 bill in your pocket than you think - read on for some interesting facts about U.S. currency.
  43. Information Overload: How It Hurts Investors

    There's a fine line between staying informed and being overloaded with financial information.
  44. What It Really Takes To Succeed In Business

    It takes a lot more than an Ivy League education to become a CEO.
  45. The Difference Between Finance And Economics

    Learn the differences between these closely related disciplines and how they inform and influence each other.
  46. Valuing Firms Using Present Value Of Free Cash Flows

    When trying to evaluate a company, it always comes down to determining the value of the free cash flows and discounting them to today.
  47. 5 Investment Risks Created By Global Warming

    Climate-change deniers and believers alike would be wise to prepare for the worst.
  48. Do Mergers Save Or Cost Consumers Money?

    A merger or acquisition can actually be beneficial to the customer - find out how, in this article.
  49. How Stock Market Indexes Changed Investing

    Find out how the first market averages were calculated and what they mean for investors today.
  50. The Economics Of A Successful Marriage

    These theories can keep multi-million dollar corporations afloat, so they should be able to increase the odds of wedded bliss.
  51. Top 4 Signs Of Over-Diversification

    Learn how to spot over-diversification in your portfolio and find out why some financial advisors are motivated to do it.
  52. 4 Psychological Traps That Are Killing Your Portfolio

    Sometimes your largest financial hurdle is our head. Learn about the common mind-traps that trip up investors.
  53. Demographic Trends And The Implications For Investment

    See how people's movements, ages, deaths and buying patterns affect portfolios worldwide.
  54. Gold Or Oil: Which Is The Hotter Investment?

    Investing in gold and oil is now easy and cheap for investors, but not without risk.
  55. Using Porter's 5 Forces To Analyze Stocks

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

    We look at what life would be like in a deflationary environment, and what you can do to protect your investments.
  57. Digging Into The Dividend Discount Model

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

    Hyperinflation isn't some historical curiosity. It is a very real risk that countries and governments still struggle with today.
  59. David Sokol: Buffett's Former Right-Hand Man

    Sokol contrasts sharply with Buffett's management style, but he can help Berkshire thrive once Buffett decides to move on.
  60. Option Price-Volatility Relationship: Avoiding Negative Surprises

    Learn about the price-volatility dynamic and its dual effect on option positions.
  61. How The Loch Ness Monster Affects The Economy

    Do sightings of Bigfoot, Nessie and UFOs lead to massive market fluctuations?
  62. How To Calculate Required Rate Of Return

    The required rate of return is used by investors and corporations to evaluate investments. Find out how to calculate it.
  63. How To Become A Corporate Board Member

    We look at how corporate boards are constructed, and how investors can get involved.
  64. Dynamic Current Ratio: What It Is And How To Use It

    Learn why this ratio may be a good alternative to the current, cash and quick ratios.
  65. Why Stocks Outperform Bonds

    Why have stocks historically produced higher returns than bonds? It's all a matter of risk.
  66. What Investors Should Know About Interest Rates

    Understanding interest rates helps you answer the fundamental question of where to put your money.
  67. Time Value Of Money: Determining Your Future Worth

    Determining monthly contributions to college funds, retirement plans or savings is easy with this calculation.
  68. Microfinance: What It Is And How To Get Involved

    This growing industry is full of opportunities for the socially conscious investor.
  69. Using Technical Indicators To Develop Trading Strategies

    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.
  70. Strategies For Determining The Market's True Worth

    Learn the strengths and weaknesses of passive and active management when trying to uncover the overall market's worth.
  71. Is Your Portfolio Light On Stocks? It May Be Time For A Switch

    Low risk investments only offer low rewards. Investors may find it advantageous to put at least some money back into the stock market.
  72. The Problem With Financial Journalism

    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.
  73. Efficient Market Hypothesis: Is The Stock Market Efficient?

    Deciding whether it's possible to attain above-average returns requires an understanding of EMH.
  74. Investments That Would Have Made You Rich In 2010

    These companies and investments made huge gains in 2010 - did you get in while the getting was good?
  75. January Effect Revives Battered Stocks

    Make sure you buy in low to ride this phenomenon for all it's worth.
  76. How Riots Influence An Economy

    Economic austerity measures have produced some riots in the hardest-hit countries, but do these protestors’ bold tactics actually get them anywhere?
  77. Internal Rate Of Return: An Inside Look

    Use this method to choose which project or investment is right for you.
  78. How Your Tax Rate Is Determined

    Feel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.
  79. History Of The U.S. Federal Trade Commission

    Since the early 1900s, the Federal Trade Commission has been working to protect U.S. citizens from corporations.
  80. The Capital Asset Pricing Model: An Overview

    CAPM helps you determine what return you deserve for putting your money at risk.
  81. Why Investments That "Feel" Safe May Not Be

    Investors tend to be adventurous in situations where they feel protected, but risk compensation theory suggests this may backfire.
  82. Does Your Personality Match Your Trading Methods?

    Investing has ways to successfully accommodate a variety of personalities. Learn how to align your trading with your traits.
  83. Trading With Gaussian Models Of Statistics

    The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications.
  84. The Ghouls And Monsters On Wall Street

    Learn about some of the creepiest cases of fraud and the characters behind them.
  85. For Higher Stock Returns, Vote Republican Or Democrat?

    The president's political party is correlated to market performance. Find out which party tends to outperform.
  86. The Rise Of The Modern Investment Bank

    Get to know a little bit about the institutions whose actions help to guide free markets.
  87. 10 Reasons To Fear The U.S. Economy

    With Halloween around the corner, here are some spooky thoughts about the economy.
  88. Does Bad PR Make For A Good Investing Opportunity?

    Like most other kinds of turnaround investing, investing in the face of bad PR can be a high-risk/high-reward situation.
  89. Haunting Wall Street: The Halloween Terminology Of Investing

    Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.
  90. Bet Smarter With The Monte Carlo Simulation

    This technique can reduce uncertainty in estimating future outcomes.
  91. Drastic Currency Changes: What's The Cause?

    Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.
  92. Use Duration And Convexity To Measure Bond Risk

    Find out how this measure can help fixed-income investors manage their portfolios.
  93. Your Worst Financial Mistakes And Why You Made Them

    No one intends to make a financial mistake, but an unexpected disaster or poor planning could leave you in financial distress.
  94. Top 3 Pitfalls Of Discounted Cash Flow Analysis

    The DCF method can be difficult to apply to real-life valuations. Find out where it comes up short.
  95. Do-It-Yourself Analyst Predictions

    Regular investors can build their own financial models using the mosaic theory.
  96. Know Your Counterparty When Day Trading

    This can provide insight into how the market is likely to act based on your presence, orders and transactions.
  97. Investing Myths That Need To Go

    Certain investing myths just won't die. Find out how dated sayings could be costing you.
  98. 6 Basic Financial Ratios And What They Reveal

    These formulas can help you pick better stocks for your portfolio once you learn how to use them.
  99. Do Financial Decisions Get Better With Age?

    Like a fine wine, you no doubt get better as you get older, but your money choices might not.
  100. Spotting Companies In Financial Distress

    What are the warning signs that a company is struggling - or worse, sinking - financially? Read on to find out.
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