Financial Theory Articles

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.

As trading technology improves access, individual investors may have more of a say in the direction of the market.

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.

Standard & Poor's downgraded the outlook on U.S. Treasuries from "stable" to "negative." We'll look at what this means for investors.

There's more to that $10 bill in your pocket than you think - read on for some interesting facts about U.S. currency.

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

It takes a lot more than an Ivy League education to become a CEO.

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.

A merger or acquisition can actually be beneficial to the customer - find out how, in this article.

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

These theories can keep multi-million dollar corporations afloat, so they should be able to increase the odds of wedded bliss.

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.

Investing in gold and oil is now easy and cheap for investors, but not without risk.

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

We look at what life would be like in a deflationary environment, and what you can do to protect your investments.

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.

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

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

Do sightings of Bigfoot, Nessie and UFOs lead to massive market fluctuations?

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

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

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.

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.

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

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

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.

These companies and investments made huge gains in 2010 - did you get in while the getting was good?

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

Economic austerity measures have produced some riots in the hardest-hit countries, but do these protestors’ bold tactics actually get them anywhere?

Use this method to choose which project or investment is right for you.

Feel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.

Learn strategies for investing in this price-weighted index and how to interpret its movements.

Since the early 1900s, the Federal Trade Commission has been working to protect U.S. citizens from corporations.

CAPM helps you determine what return you deserve for putting your money at risk.

Investors tend to be adventurous in situations where they feel protected, but risk compensation theory suggests this may backfire.

Investing has ways to successfully accommodate a variety of personalities. Learn how to align your trading with your traits.

The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications.

International investors need to be aware of the staggering correlation between tax rates and economic performance.

Learn about some of the creepiest cases of fraud and the characters behind them.

The president's political party is correlated to market performance. Find out which party tends to outperform.

Get to know a little bit about the institutions whose actions help to guide free markets.

With Halloween around the corner, here are some spooky thoughts about the economy.

Beware of zombies and Jekyll and Hyde companies! Read about the spooky terms circulating Wall Street.

Like most other kinds of turnaround investing, investing in the face of bad PR can be a high-risk/high-reward situation.

This technique can reduce uncertainty in estimating future outcomes.

Currency fluctuations often defy logic. Learn the trends and factors that result in these movements.

Find out how this measure can help fixed-income investors manage their portfolios.

No one intends to make a financial mistake, but an unexpected disaster or poor planning could leave you in financial distress.

The DCF method can be difficult to apply to real-life valuations. Find out where it comes up short.

Regular investors can build their own financial models using the mosaic theory.

This can provide insight into how the market is likely to act based on your presence, orders and transactions.

Certain investing myths just won't die. Find out how dated sayings could be costing you.

Learn the natural log and exponential functions used to calculate this value.

These formulas can help you pick better stocks for your portfolio once you learn how to use them.

Like a fine wine, you no doubt get better as you get older, but your money choices might not.

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

Most investors buy high and sell low, but you can avoid this trap by using some simple strategies.

Wall Street brokers: They’re all millionaires, walking around New York in their fancy suits as they rake in the big bucks, right? Think again. Here are some Wall Street secrets that go against all these popular beliefs.

Use these calculations to uncover the risk involved in your investments.

When it comes to hedge funds, this measure is not reliable on its own.

If you believe the market smiles on those who focus on value, growth or income, this vehicle may be for you.

When a PR problem arises, your company will be judged on how you handle it. Are you ready?

Make your trading safer and more streamlined by following these simple guidelines.

By following some broad allocation guidelines, new investors can build the portfolio they want.

The ratings agencies are refusing to take on the legal risks of the new rules, leaving investors with a dilemma.

This simple ratio will tell you how much that extra return is really worth.

Duelling guitars, frenetic drumming, ear-splitting vocals... and solid investment advice?

The P/E ratio is a valuable tool when deciding on an investment, but it's not the only thing to consider.

The consumption capital asset pricing model smoothes over some of CAPM's weaknesses to make sense of risk aversion.

These key performance metrics will help you decide if your trading strategy is a winner.

Calculate returns frequently and accurately to ensure that you're meeting your investing goals.

See the model in action with real data and evaluate whether its assumptions are valid.

Discover how some strange human tendencies can play out in the market, posing the question: are we really rational?

Getting rid of debt is usually a good thing, but companies can also use it to become more profitable.