The Curriculum

Your complete lesson plan

Every article on the site, arranged as a course. Work through the units in order and you get the equivalent of a full investments education, from what a financial asset is to how professionals build and protect wealth. Or jump straight to any single lesson when you just need one idea explained.

36 units, 210 lessons, roughly 8 minutes each

How to use this. Each unit is a self contained block of short lessons that builds on the units before it. Read a unit's lessons in the order listed, then move on; at about 8 minutes per lesson, most units fit in a single evening. If you are already comfortable with the basics, skim the unit goals and start wherever the material stops feeling familiar.

Track one

Markets and Theory

Units 01 through 28 cover the mechanics of markets and the theory behind portfolio construction, the way a graduate investments course would.

Unit 01

The Investment Environment

After this unit you will be able to explain what financial assets are, who the players in the markets are, and how the whole system fits together.

8 lessonsabout 64 min
  1. Real Assets versus Financial Assets
  2. Financial Assets
  3. Financial Markets and the Economy
  4. The Investment Process
  5. Markets Are Competitive
  6. The Players
  7. The Financial Crisis of 2008
  8. Outline of the Text
Unit 02

Asset Classes and Financial Instruments

After this unit you will be able to identify the major asset classes, from money market instruments to derivatives, and what each is for.

5 lessonsabout 40 min
  1. The Money Market
  2. The Bond Market
  3. Equity Securities
  4. Stock and Bond Market Indexes
  5. Derivative Markets
Unit 03

How Securities Are Traded

After this unit you will be able to follow a security from issuance through trading, including margin, short sales, and the rules that govern it all.

10 lessonsabout 80 min
  1. How Firms Issue Securities
  2. How Securities Are Traded
  3. The Rise of Electronic Trading
  4. U. S. Markets
  5. New Trading Strategies
  6. Globalization of Stock Markets
  7. Trading Costs
  8. Buying on Margin
  9. Short Sales
  10. Regulation of Securities Markets
Unit 04

Mutual Funds and Other Investment Companies

After this unit you will be able to compare funds and ETFs, read their costs, and judge their performance claims.

8 lessonsabout 64 min
  1. Investment Companies
  2. Types of Investment Companies
  3. Mutual Funds
  4. Costs of Investing in Mutual Funds
  5. Taxation of Mutual Fund Income
  6. Exchange-Traded Funds
  7. Mutual Fund Investment Performance: A First Look
  8. Information on Mutual Funds
Unit 05

Risk, Return, and the Historical Record

After this unit you will be able to measure risk and return properly and read a century of market history without fooling yourself.

9 lessonsabout 72 min
  1. Determinants of the Level of Interest Rates
  2. Comparing Rates of Return for Different Holding Periods
  3. Bills and Inflation, 1926 to 2012
  4. Risk and Risk Premiums
  5. Time Series Analysis of Past Rates of Return
  6. The Normal Distribution
  7. Deviations from Normality and Risk Measures
  8. Historic Returns on Risky Portfolios
  9. Long-Term Investments
Unit 06

Capital Allocation to Risky Assets

After this unit you will be able to decide how much of a portfolio belongs in risky assets versus safe ones, based on your own risk tolerance.

6 lessonsabout 48 min
  1. Risk and Risk Aversion
  2. Capital Allocation across Risky and Risk-Free Portfolios
  3. The Risk-Free Asset
  4. Portfolios of One Risky Asset and a Risk-Free Asset
  5. Risk Tolerance and Asset Allocation
  6. Passive Strategies: The Capital Market Line
Unit 07

Optimal Risky Portfolios

After this unit you will be able to explain why diversification works and how the Markowitz model builds an efficient portfolio.

5 lessonsabout 40 min
  1. Diversification and Portfolio Risk
  2. Portfolios of Two Risky Assets
  3. Asset Allocation with Stocks, Bonds, and Bills
  4. The Markowitz Portfolio Optimization Model
  5. Risk Pooling, Risk Sharing, and the Risk of Long-Term Investments
Unit 08

Index Models

After this unit you will be able to use the single index model to simplify portfolio construction and estimate a stock's beta.

5 lessonsabout 40 min
  1. A Single-Factor Security Market
  2. The Single-Index Model
  3. Estimating the Single-Index Model
  4. Portfolio Construction and the Single-Index Model
  5. Practical Aspects of Portfolio Management with the Index Model
Unit 09

The Capital Asset Pricing Model

After this unit you will be able to state what the CAPM says about expected returns and where it holds up or breaks down in practice.

4 lessonsabout 32 min
  1. The Capital Asset Pricing Model
  2. Assumptions and Extensions of the CAPM
  3. The CAPM and the Academic World
  4. The CAPM and the Investment Industry
Unit 10

Arbitrage Pricing Theory and Multifactor Models

After this unit you will be able to explain how multifactor models extend the CAPM and what the Fama-French factors capture.

5 lessonsabout 40 min
  1. Multifactor Models: An Overview
  2. Arbitrage Pricing Theory
  3. The APT, the CAPM, and the Index Model
  4. A Multifactor APT
  5. The Fama-French (FF) Three-Factor Model
Unit 11

The Efficient Market Hypothesis

After this unit you will be able to argue both sides of the market efficiency debate and know what the evidence actually shows.

5 lessonsabout 40 min
  1. Random Walks and the Efficient Market Hypothesis
  2. Implications of the EMH
  3. Event Studies
  4. Are Markets Efficient?
  5. Mutual Fund and Analyst Performance
Unit 12

Behavioral Finance and Technical Analysis

After this unit you will be able to name the main behavioral biases that move markets and see how technical analysis relates to them.

2 lessonsabout 16 min
  1. The Behavioral Critique
  2. Technical Analysis and Behavioral Finance
Unit 13

Empirical Evidence on Security Returns

After this unit you will be able to summarize what decades of empirical testing say about the pricing models from earlier units.

5 lessonsabout 40 min
  1. The Index Model and the Single-Factor APT
  2. Tests of the Multifactor CAPM and APT
  3. Fama-French-Type Factor Models
  4. Liquidity and Asset Pricing
  5. Consumption-Based Asset Pricing and the Equity Premium Puzzle
Unit 14

Bond Prices and Yields

After this unit you will be able to price a bond, read its yield, and understand how default risk changes both.

5 lessonsabout 40 min
  1. Bond Characteristics
  2. Bond Pricing
  3. Bond Yields
  4. Bond Prices over Time
  5. Default Risk and Bond Pricing
Unit 15

The Term Structure of Interest Rates

After this unit you will be able to read a yield curve and explain the competing theories of why it takes the shape it does.

6 lessonsabout 48 min
  1. The Yield Curve
  2. The Yield Curve and Future Interest Rates
  3. Interest Rate Uncertainty and Forward Rates
  4. Theories of the Term Structure
  5. Interpreting the Term Structure
  6. Forward Rates as Forward Contracts
Unit 16

Managing Bond Portfolios

After this unit you will be able to measure a bond portfolio's interest rate risk with duration and convexity, and manage it actively or passively.

4 lessonsabout 32 min
  1. Interest Rate Risk
  2. Convexity
  3. Passive Bond Management
  4. Active Bond Management
Unit 17

Macroeconomic and Industry Analysis

After this unit you will be able to work top down from the global economy through business cycles to the prospects of a single industry.

6 lessonsabout 48 min
  1. The Global Economy
  2. The Domestic Macroeconomy
  3. Demand and Supply Shocks
  4. Federal Government Policy
  5. Business Cycles
  6. Industry Analysis
Unit 18

Equity Valuation Models

After this unit you will be able to value a stock with comparables, dividend discount models, and free cash flow approaches.

6 lessonsabout 48 min
  1. Valuation by Comparables
  2. Intrinsic Value versus Market Price
  3. Dividend Discount Models
  4. Price to Earnings Ratio
  5. Free Cash Flow Valuation Approaches
  6. The Aggregate Stock Market
Unit 19

Financial Statement Analysis

After this unit you will be able to read the three major financial statements and use ratio analysis to judge a firm's real performance.

7 lessonsabout 56 min
  1. The Major Financial Statements
  2. Measuring Firm Performance
  3. Profitability Measures
  4. Ratio Analysis
  5. An Illustration of Financial Statement Analysis
  6. Comparability Problems
  7. Value Investing: The Graham Technique
Unit 20

Options Markets: Introduction

After this unit you will be able to read an option contract, sketch its payoff at expiration, and combine options into basic strategies.

7 lessonsabout 56 min
  1. The Option Contract
  2. Values of Options at Expiration
  3. Option Strategies
  4. The Put-Call Parity Relationship
  5. Option-Like Securities
  6. Financial Engineering
  7. Exotic Options
Unit 21

Option Valuation

After this unit you will be able to price an option with the binomial and Black-Scholes models and know what each assumes.

6 lessonsabout 48 min
  1. Option Valuation: Introduction
  2. Restrictions on Option Values
  3. Binomial Option Pricing
  4. Black-Scholes Option Valuation
  5. Using the Black-Scholes Formula
  6. Empirical Evidence on Option Pricing
Unit 22

Futures Markets

After this unit you will be able to explain how futures contracts work, how they trade, and what determines their prices.

5 lessonsabout 40 min
  1. The Futures Contract
  2. Trading Mechanics
  3. Futures Markets Strategies
  4. Futures Prices
  5. Futures Prices versus Expected Spot Prices
Unit 23

Futures, Swaps, and Risk Management

After this unit you will be able to see how futures and swaps hedge currency, equity, interest rate, and commodity risk.

5 lessonsabout 40 min
  1. Foreign Exchange Futures
  2. Stock-Index Futures
  3. Interest Rate Futures
  4. Swaps
  5. Commodity Futures Pricing
Unit 24

Portfolio Performance Evaluation

After this unit you will be able to evaluate a manager's track record with the right risk adjusted measures and attribute where returns came from.

6 lessonsabout 48 min
  1. The Conventional Theory of Performance Evaluation
  2. Performance Measurement for Hedge Funds
  3. Performance Measurement with Changing Portfolio Composition
  4. Market Timing
  5. Style Analysis
  6. Performance Attribution Procedures
Unit 25

International Diversification

After this unit you will be able to weigh the risks and diversification benefits of investing beyond your home market.

5 lessonsabout 40 min
  1. Global Markets for Equities
  2. Risk Factors in International Investing
  3. International Investing: Risk, Return, and Benefits from Diversification
  4. Assessing the Potential of International Diversification
  5. International Investing and Performance Attribution
Unit 26

Hedge Funds

After this unit you will be able to describe the main hedge fund strategies, their fee structures, and why measuring their performance is hard.

6 lessonsabout 48 min
  1. Hedge Funds versus Mutual Funds
  2. Hedge Fund Strategies
  3. Portable Alpha
  4. Style Analysis for Hedge Funds
  5. Performance Measurement for Hedge Funds
  6. Fee Structure in Hedge Funds
Unit 27

The Theory of Active Portfolio Management

After this unit you will be able to explain how the Treynor-Black and Black-Litterman frameworks turn forecasts into portfolios, and what active management is really worth.

6 lessonsabout 48 min
  1. Optimal Portfolios and Alpha Values
  2. The Treynor-Black Model and Forecast Precision
  3. The Black-Litterman Model
  4. Treynor-Black versus Black-Litterman: Complements, Not Substitutes
  5. The Value of Active Management
  6. Concluding Remarks on Active Management
Unit 28

Investment Policy and the Framework of the CFA Institute

After this unit you will be able to write an investment policy statement and manage a portfolio the way a professional fiduciary would.

7 lessonsabout 56 min
  1. The Investment Management Process
  2. Constraints
  3. Policy Statements
  4. Asset Allocation
  5. Managing Portfolios of Individual Investors
  6. Pension Funds
  7. Investments for the Long Run

Track two

The Professional Wealth Track

Units 29 through 36 apply everything above to the situation of doctors, lawyers, and other high earning professionals: the late start, the big loans, and the moves that matter most.

Unit 29

The Professional's Starting Point

After this unit you will be able to see clearly where a high earning professional actually stands: behind schedule, not automatically rich, and with a concrete number to aim for.

4 lessonsabout 32 min
  1. The late start problem: why professionals begin wealth building a decade behind
  2. Why a high income does not make you rich
  3. Net worth benchmarks by career stage for professionals
  4. What a million dollars actually buys in retirement
Unit 30

Training Years and the Savings Foundation

After this unit you will be able to manage the education debt years well and lock in the savings habits that do most of the work later.

8 lessonsabout 64 min
  1. Minimizing education debt before it compounds
  2. Choosing a degree and school with return on investment in mind
  3. Money moves during residency and training years
  4. Roth contributions in low income training years
  5. Live like a resident: the wealth building window after training
  6. The 20 percent savings rate for late starters
  7. Your retirement number and how to compute it
  8. Why savings rate beats investment returns early on
Unit 31

Investing on Autopilot

After this unit you will be able to build a simple index portfolio you can hold through crashes, and know the rare cases for deviating from it.

5 lessonsabout 40 min
  1. Passive index investing as the default road to wealth
  2. Why chasing past performance fails
  3. Picking an asset allocation you can actually hold
  4. Staying the course through market crashes
  5. When to deviate from index funds (almost never)
Unit 32

Getting Financial Advice

After this unit you will be able to tell how any advisor is paid, shop for fiduciary advice, and decide whether you need help at all.

3 lessonsabout 24 min
  1. How financial professionals get paid: commissions, AUM, flat fees
  2. Fee only fiduciary advice and how to shop for it
  3. Managing your own money versus paying for help
Unit 33

Asset Protection and Estate Planning

After this unit you will be able to protect what you build with the boring tools that work, and pass it on without probate drama.

7 lessonsabout 56 min
  1. Umbrella and malpractice insurance as the first line of asset protection
  2. Retirement accounts as asset protection vehicles
  3. Titling assets and state exemptions for protection
  4. Why exotic asset protection trusts are usually oversold
  5. Wills, beneficiary designations, and guardianship
  6. Avoiding probate with designations and simple trusts
  7. The stepped up basis and holding appreciated assets until death
Unit 34

Taxes and Practice Structure

After this unit you will be able to fill tax advantaged accounts in the right order and know when structuring your practice actually saves money.

6 lessonsabout 48 min
  1. Marginal versus effective tax rates for high earners
  2. Filling every tax advantaged account in the right order
  3. Legally reducing taxes: deductions, timing, and asset location
  4. Sole proprietor versus S corporation for professionals
  5. When incorporating actually saves money
  6. Retirement plan design inside your own practice
Unit 35

Spending, Giving, and Living Well

After this unit you will be able to balance enjoying money today against retiring well, and spot the lifestyle traps aimed at professionals.

4 lessonsabout 32 min
  1. Balancing enjoying today against retiring well
  2. Houses, cars, and the professional discount trap
  3. Giving and money with purpose for high earners
  4. Financial literacy as a professional duty
Unit 36

Insurance, Loans, and Career Risk

After this unit you will be able to insure the right risks, handle student loans and the house decision, and keep your finances flexible enough to survive burnout or a career change.

9 lessonsabout 72 min
  1. Own occupation disability insurance: the policy that protects your career
  2. Sizing term life insurance correctly
  3. Whole life insurance pitches and why professionals are targets
  4. Student loan strategy: forgiveness versus refinancing
  5. The right time for a professional to buy a house
  6. Burnout, career longevity, and financial independence
  7. Teaching your family financial stewardship
  8. Recognizing fraud and bad products aimed at professionals
  9. Cutting back or changing careers: financing flexibility

Looking for the full story?

Articles are quick reference. If you want a subject taught properly from the ground up, start with the Guides, or read The Laws of Investing for the compressed version of everything.

everything here is education, not individualized financial advice