Investment Theory

Most investing courses don’t bother to teach you the investment theory, perhaps telling you what you should be doing, while leaving you with little understanding as to why.

Luckily, we’ve created a comprehensive course that doesn’t gloss over these important details. We start by introducing all of the relevant investment theory that will act as a foundation for everything that is to follow.

By explaining these concepts in detail, you’ll see why the techniques we describe later on in the course, really do work in practice. And by understanding these finance fundamentals you’ll have the confidence to take your own financial decisions, knowing that these decisions are backed-up by the ideas of some of the greatest academic minds in finance.

What’s included in this section:

We’re all human, and in many ways, we all suffer from the same cognitive and emotional biases. Some of our natural responses are evolutionary, and are specifically intended to help us in certain situations (e.g., avoiding danger). However, in some aspects of modern life these very same emotional reactions can work to our disadvantage, for example when it comes to investing.

It is an entirely natural human response that we should feel wary of the stock market

Conker finance

It may not be possible to re-wire your brain to react emotionally in a different way, particularly when this natural response is so ingrained in our human psyche and behaviour. However, by understanding some of these biases and how, in some instances, they adversely affect our financial decisions (and outcomes); we can, at least, recognise this in ourselves, and then attempt to adjust for these biases in our financial planning.

In addition to the emotional side of investing, we also take our time to carefully and clearly explain the following essential investment ideas:

• What are stocks and bonds?
• How do we measure risk?
• What is the difference between “trading” and “investing”?
• The importance of diversification, and what this means for portfolio construction

Everything we discuss in this first section shall form the foundation of all the practical topics we address later, from financial planning to actually constructing an investment portfolio.

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Why you can trust us to teach you this material:

Tom has more than 8 years of experience working in the financial markets. He is an experienced practitioner with a desire to broaden access to financial education.

In addition to this wealth of real-world experience, he has a strong educational background having achieved a master’s degree in Mathematics (Part III of the Mathematical Tripos) from the University of Cambridge.

Tom is also a Chartered Financial Analyst (CFA), having passed all 3 examinations at the first attempt.

Disclaimer

Kindly note that the information provided is for informational and educational purposes only. Your use of this site and any contents herein is solely at your own risk. You are responsible for any decisions made in relation to personal financial planning or investments. Your actual results may differ from results reported for a variety of reasons. No representation whatsoever is made that you shall achieve any profit or loss similar to results shown. Your own experience may, in certain circumstances, differ dramatically. You can access our full disclaimer here.