Finance Articles

I am very interested in personal finance, economics, trading and investing - particularly from an analytical and quantitative point of view. Here are some articles to help you begin getting out of debt, learning how to save and eventually learning to invest.

The best place to start, is to read through the How To Become Wealthy articles, which will give you a solid grounding in basic finance and how to gain independence with your time.

For those of you who are more mathematically inclined, I've added some tutorials and thoughts on Quantitative Analysis/Financial Engineering, primarily on the pricing of financial derivatives.

How To Become Wealthy

Forming the Mindset

Increasing Your Personal 'Profit'

Freeing Up Your Time

Gaining a Financial Education

  • The Power of Abstraction - Understanding the Financial Landscape
  • Your Biggest Expense - Taxation
  • Legal Structures - Sole Traders, Partnerships, LLPs, LLCs
  • Personal Financial Structures - ISAs, SIPPs, Mortgages
  • Capital Finance - Equity and Debt
  • Markets, Asset Classes, Risk and Return
  • Mathematics and Finance - A Great Partnership

Producing and Investing in Assets

  • Creating Your Own Assets - Entrepreneurship
  • Investing and Trading other Assets
  • Using Cashflow to Finance Additional Asset Purchases
  • Creating an Optimal Investment Portfolio

Being Wealthy

  • Managing Wealth
  • High Risk Investing - Private Equity and Hedge Funds
  • Giving Back - Philanthropy, Endowment and Charitable Causes

The following is a much more detailed account of the financial world. I have begun by laying out an approximate structure that I will follow as I add each section. In time, I hope it will become a useful resource.

Personal Finance

  • Starting a Portfolio
  • Retirement Planning: Pensions and SIPPs
  • ISAs
  • Property/Mortgages
  • Insurance
  • Sharedealing and Brokerage
  • Tax Efficiency - Income Tax, National Insurance, CGT, Inheritance/Estate Tax, Corporation Tax

Investing

The Basics

  • Risk vs Return
  • Compound Interest
  • Dividends
  • Fees
  • Markets
  • Instruments
  • Funds
  • Economic Cycles
  • Historical Performance
  • 2008?

Financial Markets

  • Equities - US, UK, Europe, Asia
  • Fixed Income - Sovereign and Corporate Bonds, Interest Rates, Credit Derivatives
  • Foreign Exchange
  • Money Markets
  • Commodities - Energy, Metals, Softs

Liquid Instruments

  • Equities - Common Stock and Exchanges
  • Indices - Equity, Derivative and Other
  • Derivatives - Futures & Options, Warrants, CFDs, Spread Betting, Structured Products, Exotics, Swaps/Swaptions

Pooled Investments

  • Unit Trusts
  • Open Ended Investment Companies (OEICs)
  • Exchange Traded Funds (ETFs)
  • Investment Trusts
  • Fund Supermarkets
  • Private Equity Funds
  • Hedge Funds

Illiquid Investments

  • Retail Property
  • Commercial Property
  • Collectibles - Art, Classic Cars, Stamps, Wine

Private Equity

  • Seed Investment and Business Angels
  • Venture Capital (Series A-C)
  • Private Equity (Series D+)
  • Mergers & Acquisitions
  • Strategies
  • Performance

Hedge Funds

  • Classification
    • Equity
    • Equity Long/Short
    • Global Macro
    • High Frequency
    • Statistical Arbitrage
    • Convertible Arbitrage
    • Fund-of-funds
  • Strategies
  • Performance

Corporate Valuation

Corporate Accounts

  • Profit and Loss Account
  • Balance Sheet
  • Cash Flow Statement
  • Chairman and Chief Executive Statement
  • What To Look For

Corporate Investment Metrics

  • Backward-Looking Metrics
  • Current Metrics
  • Forward Looking Metrics
  • Reading the Financial Pages
  • What To Look For

Investment Strategy

Portfolio Allocation

  • Instrument Universe
  • Instrument Availability
  • CAPM and The Efficient Frontier
  • Diversification
  • Liquidity and Redemptions
  • Performance Measurement
  • Tax Efficiency

Low Frequency Investment Basics

  • Instruments and Markets
  • Personal Risk Tolerance
  • ISA, SIPP and Sharedealing accounts
  • Leave It Alone

Higher Frequency Trading Basics

  • Fundamental Analysis - Corporate Valuation, Sector Analysis and Macroeconomic Considerations
  • Technical Analysis - Trend Detection, Mean Reversion and Indicators
  • Time Horizons
  • Risk Management - Leverage, Market Neutrality, Hedging, Stop Losses, Volatility and Correlation

Higher Frequency Trading Systems

  • Designing a Trading System
  • Choosing a Market
  • Risk Considerations
  • System Implementation
  • Obtaining Financial Data - Market, Macroeconomic, Proprietary and Data Cleansing
  • Fees and Transaction Costs - Fixed, Variable and Non-Linear
  • Backtesting the System
  • Training Data - Parameter Varation/Overfitting, Look-Ahead Bias, Automatic Risk Management
  • Estimating Performance - Risk/Reward and Profit/Loss
  • Model/Live Performance Comparison

Entrepreneurial Investing

Establishing Pooled Structures

  • Why?
  • Investment Clubs
  • Angel Investing
  • Early Stage Private Equity (Venture Capital) Funds
  • Late Stage Private Equity Funds
  • Hedge Funds - The Players, Auditors, Administrators, Custodian, Legals
  • Retail Fund Structures - Mutual Funds

Operating a Fund

  • Marketing
  • Regulation
  • Cashflow
  • Redemption/Liquidity
  • Fund Structure

The remaining articles discuss financial engineering in detail, but more from a mathematical and implementation point of view.

Quantitative Analysis/Financial Engineering

Quant Reading Lists

Derivatives Pricing