Financial Theory Articles

  1. How To Avoid Emotional Investing

    Most investors buy high and sell low, but you can avoid this trap by using some simple strategies.
  2. 7 Secrets Of Wall Street

    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.
  3. Using Historical Volatility To Gauge Future Risk

    Use these calculations to uncover the risk involved in your investments.
  4. How The Sharpe Ratio Can Oversimplify Risk

    When it comes to hedge funds, this measure is not reliable on its own.
  5. Crisis Management Strategies For Business Owners

    When a PR problem arises, your company will be judged on how you handle it. Are you ready?
  6. 4 Steps To Creating A Better Investment Strategy

    Make your trading safer and more streamlined by following these simple guidelines.
  7. Portfolio Basics For The Beginner Investor

    By following some broad allocation guidelines, new investors can build the portfolio they want.
  8. The Ratings Game - A Solution

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

    This simple ratio will tell you how much that extra return is really worth.
  10. 10 Investing Tips From Heavy Metal

    Duelling guitars, frenetic drumming, ear-splitting vocals... and solid investment advice?
  11. Profit With The Power Of P/E Ratio

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

    The consumption capital asset pricing model smoothes over some of CAPM's weaknesses to make sense of risk aversion.
  13. Interpreting A Strategy Performance Report

    These key performance metrics will help you decide if your trading strategy is a winner.
  14. Gauge Portfolio Performance By Measuring Returns

    Calculate returns frequently and accurately to ensure that you're meeting your investing goals.
  15. Calculating The Equity Risk Premium

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

    Discover how some strange human tendencies can play out in the market, posing the question: are we really rational?
  17. Deleveraging: What It Means To Corporate America

    Getting rid of debt is usually a good thing, but companies can also use it to become more profitable.
  18. Be Risk Diverse, Not Risk Averse

    You have to take on some risk, but finding the right level is key to your portfolio's success - and your sanity.
  19. Deflation: A Two-Sided Coin

    Deflation fears are sweeping the U.S. , but the effects of this economic phenomenon are not all bad.
  20. Goldman: Guilty Of Finance, Innocent On Fraud

    While Goldman is no angel, the focus on CDO and derivatives transactions is misguided at best.
  21. The Latest, Greatest Corporate Mergers And Acquisitions

    Find out which companies have come together lately and why.
  22. An Introduction To Value at Risk (VAR)

    Volatility is not the only way to measure risk. Learn about the "new science of risk management".
  23. How To Convert Value At Risk To Different Time Periods

    Volatility is not the only way to measure risk. Learn about the "new science of risk management".
  24. How Influential Economists Changed Our History

    Find out how these five groundbreaking thinkers laid our financial foundations.
  25. When To Sell Stocks

    Buying at the right price determines profit, but selling at the right price locks it in.
  26. Corzine: Goldman Targeted Because Of Success

    Democratic stalwart tells Wall Street crowd to accept financial reform.
  27. What Is the Quantity Theory of Money?

    Take a look at the tenets, assumptions and challenges of monetarism's principal theory.
  28. Master Futures Trading With Trend-Following Indicators

    The futures market is a lot less scary when these indicators are used to establish current trends.
  29. The Equity-Risk Premium: More Risk For Higher Returns

    Learn how the expected extra return on stocks is measured and why academic studies usually estimate a low premium.
  30. A Clear Look At EBITDA

    This measure has its benefits, but it can also present earnings through rose-colored glasses.
  31. Lipstick And The Stock Market: Connection?

    We test the theory that lipstick sales thrive during an economic downturn.
  32. An Introduction To The International Monetary Fund (IMF)

    Chances are you've heard of the IMF. But what does it do, and why is it so controversial?
  33. How To Profit From Investment "Losers"

    Diversification and rebalancing are keys to long-term returns.
  34. The Economics Of Natural Disasters

    Even natural disasters that take place thousands of miles away can shake up your portfolio here at home.
  35. Mutual Fund Tune-Up Delivers High-Powered Performance

    Rebalancing your portfolio will protect you from risk and ensure that your investments are performing at their best.
  36. The Happiness Index - How Prosperous Are You?

    Not all nations measure their success in dollars and material items - Bhutan, south of China, measures it in happiness.
  37. A Disaster-Protection Plan For Your Portfolio

    If you can't predict the future, you'll need to plan ahead to protect your assets from the impact of major world events.
  38. Vital Link: Manufacturing And Economic Recovery

    Manufacturing output is one of the clearest signs that an economy is recovering from a recession.
  39. Bull Market Requires A Healthy Consumer

    High debt, bad policy bode ill for stocks.
  40. This Week in Financial History: Speculative Bubbles, Bill Gates, Coca Cola and Capitalism

    From the millionaire boom and the IPO of one of the world's largest companies, read on to find out what significant financial events of the past occurred during this week.
  41. One World, One Currency: Could It Work?

    This idea has been debated for decades, but could it really work? Which countries would benefit? What are the downfalls? How would supply and printing factor in?
  42. Something Gross In GDP

    GDP is used to gauge the strength of the economy, but what is it actually measuring?
  43. Investing Books It Pays To Read

    We provide some classic and lesser-known titles to add to your collection.
  44. Can Global Investors Profit From GDP Watching?

    GDP growth is not necessarily a solid indicator of stock market returns in emerging markets. Find out what to watch instead.
  45. Tweet Your Way To A Sweet Job

    Social networks have become popular job-seeking resources. Find out how to use them to your advantage.
  46. Warren Buffett: Oracle No More?

    Though he's an investing icon, critics are pointing to several past events that signal Buffett's reign may be ending.
  47. Why Dividends Matter

    Seven words that are music to investors' ears? "The dividend check is in the mail."
  48. Did Derivatives Cause The Recession?

    We may never come to a consensus on what caused the financial collapse, but derivatives definitely share a large part of the blame.
  49. January Barometer: Did It Work?

    Find out whether this superstitious belief is worth following or little more than water cooler chatter.
  50. How Money Makes The Economy Move

    This simple example shows how central banks expand the money supply, and why the money supply must grow for the GDP to grow.
  51. How To Profit From An Inefficient Market

    Yes, it is possible to consistently beat the stock market.
  52. Which Mutual Fund Style Index Is For You?

    The Russell Investments and MSCI Barra style classification systems can help you pick the right mutual fund - if you know how they work.
  53. The Amateur Investor's Guide To Analyzing Corporate Efficiency

    Find out how the amateur investor can measure the success of management.
  54. Stock Analysts: Should You Listen?

    If you want to find out which analysts are worth following, you shouldn't take their word for it.
  55. Create Your Own Trading Strategies

    Do-it-yourself trading can be very rewarding - both psychologically and for your wallet.
  56. Options Trading: The Modidor Spread

    Use this modification of an iron condor to reduce risk and increase your chance at profiting on the trade.
  57. Structured Notes: Buyer Beware!

    At first glance, this product looks like the answer to investors' prayers. In reality, it's just too good to be true.
  58. Modern Portfolio Theory: Why It's Still Hip

    See why investors today still follow this old set of principles that reduce risk and increase returns through diversification.
  59. Projected Returns: Honing The Craft

    Find out how to forecast long-term returns on the three major asset classes.
  60. Should The U.S. Switch To A Flat Tax?

    Some countries have begun charging a flat tax rate instead of the gradual tax system of the Western world.
  61. The German Economic Miracle

    After World War II, Germany was in ruins. Learn about the country's quick rise to the third strongest economy in the world.
  62. Fight Back Against Inflation

    Inflation is often a consequence of economic recovery. Here's how you can protect your financial portfolio.
  63. 10 Great Finance Books Of 2009

    Surprisingly, not all of these books are about the recession. But they are all worth the read.
  64. Staying Home Vs. Daycare: A Financial Conundrum

    Most moms and dads make this tough decision based on emotion, but there are quite a few financial consequences to each choice, too.
  65. Identifying And Managing Business Risks

    There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
  66. The Federal Reserve: Too Powerful?

    The Federal Reserve needs its power in order to make the tough decisions that politicians can't.
  67. Earnings Sustainability: The Key To Your Investing Future

    Learn how to analyze earnings sustainability - an important part of making sound investments.
  68. The 5 Most Influential Bankers Of All Time

    These bankers shaped the current financial system - though some didn't live to see the fruits of their labor.
  69. Recession Stats You Need To Know

    We take a look at some of the most quoted recession statistics, and find out how they're calculated and who they affect.
  70. How Credit Cards Built A Plastic Empire

    A decade before Mastercard or Visa existed, the first credit card company was introduced.
  71. These Financial Products Are Too Complex For The Average Joe

    Structured financial products are so elaborate that investors are unable to assess costs and risk.
  72. Investing Lessons From Across The Pond

    There's a lot to learn from Anthony Bolton, who is known as Europe's Peter Lynch.
  73. Andre Kostolany: Germany's Stock Market Guru

    We can learn a lot from Kostolany and his "steady or shaky hand" investing philosophy.
  74. The 5 Most Feared Figures In Finance

    Gates, Soros, Icahn, Rockefeller and Morgan caused chills on Wall Street.
  75. October: The Month Of Market Crashes?

    In the finance world, October is a month to be feared, but is it justified?
  76. Is Biased Investing Holding You Back?

    Risk aversion seems to come to us naturally, preventing us from stepping into unfamiliar territory. But feeling comfortable isn't always the best thing for your portfolio.
  77. Free Cash Flow Yield: The Best Fundamental Indicator

    Cash in the bank is what every company strives to achieve. Find out how to determine how much a company is generating and keeping.
  78. Going All-In: Comparing Investing And Gambling

    People often compare stocks to gambling, but how close are they really?
  79. Fundamentals And Technicals: Together At Last

    It's a big mistake for a fundamental investor to ignore technical analysis. Find out how to become chart smart.
  80. Are You A Disciplined Investor?

    Don't let "financial porn" steer you away from a sensible, long-term approach to investing.
  81. State-Run Economies: From Public To Private

    Find out how former Iron Curtain countries used private enterprise to join the world financial markets.
  82. Free Market Maven: Milton Friedman

    As proponent of free market capitalism, this economist changed the way the world's economies operate.
  83. Mergers: The Sign Of Economic Recovery?

    Recent mergers by big players show economic optimism.
  84. Look Smart: Financial Calculations You Can Do In Your Head

    Ditch your financial calculator and use these handy tips for estimating complex financial calculations on the fly.
  85. Permanent Portfolio Locks In Long-Term Profits

    Harry Browne believes his "permanent portfolio" theory is the ideal long-term investing strategy.
  86. The Market's Primed For A Pullback

    Comparing stock and bond prices, it's clear that the market is ready for a major pullback.
  87. Investing Basics: Flight To Quality

    At times of market stress, investors flee from risky assets to investments the safest ones available.
  88. 5 Things To Avoid In A Bull Market

    Submission for August 28
  89. Reduce Your Risk With ICAPM

    Avoid unnecesary risks involved in CAPM calculations by also incorporating ICAPM into the mix.
  90. 5 Signs Of A Pending Bull Market

    Being able to accurately spot the beginning of a bull market can be one of the most lucrative skills around.
  91. The ABCs Of Mutual Fund Classes

    Do you understand how the various types of shares differ? We give you the pros and cons of each.
  92. 3 Ways Immigration Helps And Hurts The Economy

    Immigration can be a touchy subject, but here's the economic point of view.
  93. Buy When There's Blood In The Streets

    Contrarian investors find value in the worst market conditions. Find out how they do it.
  94. Financial Forecasting: The Bayesian Method

    This method can help refine probability estimates using an intuitive process.
  95. Banking Stress Tests: Would Yours Pass?

    In weaker economic times, banks may be tested by the government to see how safe they are.
  96. The Leverage Cliff: Watch Your Step

    Understanding your risk tolerance level can save you a lot of grief and financial instability in the future.
  97. Extreme Investing: World's Riskiest Investments

    These investments may pose a greater risk, but for brave investors, they're worth the stress.
  98. Leveraged ETFs: Too Risky For Their Own Good?

    With regulatory oversight under fire, the smart money might place an inverse bet on the future of these products.
  99. Should Interest Rates Go Up?

    An increase in interest rates could prove that that the Fed really believes the U.S. economy is starting to grow.
  100. Top 6 Recession Investing Myths

    Find out the truth about recessions and how they impact your portfolio.
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