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A free investing library for curious readers. Explore the foundations, examine the theory and learn to read the evidence behind the market’s ongoing story.
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Investing foundations
Understand what investments are, how ownership works and how markets connect buyers and sellers.
6 articles →Returns and risk
Read performance correctly and understand what the headline return leaves out.
6 articles →Portfolio theory
Explore how investments interact and the assumptions behind portfolio construction.
6 articles →Companies and valuation
Connect business performance, financial statements, expectations and stock prices.
6 articles →Understanding market moves
Interpret participation, weighting, sectors and trends without overreading a single signal.
6 articles →The economy and markets
Understand inflation, rates, economic data and cross-asset connections.
6 articles →Investing strategies
Compare approaches through their rationale, evidence, assumptions and failure conditions.
6 articles →Investor judgment and practice
Build sound research habits and connect education to ongoing market coverage.
6 articles →Chart reading and candlesticks
Read price, volume, trends and common formations through their construction, context and limitations.
12 articles →A useful place to start.
Follow your question.
60 articles
Active vs. Passive Investing
Passive investing generally seeks to follow a defined benchmark or rules-based exposure. Active investing makes decisions intended to achieve a stated objective that can differ from that benchmark. Both involve choices, costs and risks.
Research method · BeginnerBuilding an Investment Thesis
An investment thesis is a testable explanation of the business or market conditions that support a view. It connects evidence, assumptions and valuation, and identifies developments that would weaken or invalidate the interpretation.
Theory explained · BeginnerBehavioral Biases in Investing
Behavioral biases are recurring tendencies in judgment and emotion that can distort how people interpret evidence or make decisions. Recognizing a label is useful, but a repeatable research process is needed to reduce its practical effect.
Concept explained · BeginnerBreakouts and False Breakouts
A breakout is a move beyond a specified price boundary under a stated rule. A false breakout describes a move that subsequently fails under a stated failure rule. The later outcome is not known merely because the first crossing has occurred.
Concept explained · BeginnerBullish and Bearish Engulfing Candles
An engulfing pattern compares two consecutive candle bodies: the second surrounds the first in the opposite direction. Bullish and bearish labels describe traditional reversal interpretations in context. Body engulfing is different from engulfing the entire high-to-low range.
Research method · BeginnerChoosing the Right Benchmark
A benchmark is a reference used to answer a particular performance or exposure question. An appropriate comparison matches the purpose, investable universe and return conventions closely enough to make the conclusion meaningful.
Concept explained · BeginnerCommon Chart Patterns
Double tops and bottoms, head-and-shoulders formations, triangles and flags are names for recurring arrangements of price swings. Recognizing the arrangement is different from establishing that its traditional interpretation has predictive value.
Concept explained · BeginnerHow Compound Returns Work
Compounding means each period’s return applies to the value left by earlier periods. Multi-period investment returns multiply together; they usually cannot be found by simply adding the percentages.
Concept explained · BeginnerWhat Is Correlation?
Correlation summarizes the strength and direction of a linear relationship between two measured series. In portfolio analysis it often describes how returns move together over a specified history, not whether two assets are fundamentally the same.
Concept explained · BeginnerCurrencies and Commodities
Currency prices describe an exchange between units of money; commodity prices describe a specified raw material or contract. Both can connect to inflation, company earnings and portfolio returns, but their relationships are conditional rather than fixed rules.
Theory explained · IntermediateDiscounted Cash Flow Explained
Discounted cash flow estimates value by translating expected future cash flows into present value using a suitable discount rate. The calculation is conditional on forecasts, timing, risk and the kind of cash flow being valued.
Concept explained · BeginnerWhat Diversification Does
Diversification spreads exposure across investments whose outcomes are not identical. It can reduce dependence on one issuer or source of risk, but it does not guarantee a profit or prevent losses across an entire market.
Concept explained · BeginnerDividends and Total Return
A dividend is a distribution to shareholders, often in cash. Dividend yield relates a stated dividend amount to a share price. The distribution is one component of return and is not a guarantee of profit or future payments.
Concept explained · BeginnerDoji and Spinning Tops
A doji has an open and close that are equal or very close. A spinning top has a small body with wicks on both sides. These shapes summarize limited net movement from open to close, not certainty about the next interval.
Strategy explained · BeginnerDollar-Cost Averaging
Dollar-cost averaging invests equal amounts at regular intervals. It creates a consistent contribution process and buys more units when prices are lower, but it does not guarantee a profit or the best possible entry price.
Concept explained · BeginnerEarnings, EPS and Guidance
Earnings describe reported profit for a period. Earnings per share relates profit available to common shareholders to a share count. Guidance is management’s forward-looking outlook, not a reported result or a guarantee.
Theory explained · IntermediateEfficient-Market Theory
Efficient-market theory studies how available information is reflected in prices and what that implies for earning abnormal returns. It does not require that every price be perfectly correct or that future returns be predictable.
Method explained · BeginnerFundamental vs. Technical Analysis
Fundamental analysis studies the economics and financial condition behind an investment. Technical analysis studies market behavior such as price, volume and trends. They ask different questions, and neither approach removes uncertainty or guarantees an outcome.
Concept explained · BeginnerHammer, Hanging Man and Shooting Star
Hammer-family and shooting-star-family candles combine a small body with one long wick. Their traditional names depend on the preceding move as well as the shape. They suggest interpretations to test; they do not establish that a reversal will follow.
Concept explained · BeginnerHow Financial Statements Fit Together
The income statement reports operating results over a period, the balance sheet reports a financial position at a date, and the cash-flow statement explains movements in cash. Reading them together helps separate accounting profit, financing and actual cash movement.
Research method · IntermediateHow to Read a Backtest
A backtest applies a specified strategy to historical data to estimate how it would have behaved under the test’s assumptions. It is a simulation, not an actual investment record, and its credibility depends on information timing, costs and research design.
Concept explained · BeginnerHow to Read a Candlestick
A candlestick shows an interval’s open, high, low and close. The body spans the open and close; wicks reach the high and low. Read the platform’s color convention and the interval before interpreting the candle or assigning a pattern name.
Learning guide · BeginnerHow to read a market report
Start with the report's date and time window, then identify the benchmark, participation and leadership. Separate observed facts from proposed explanations, and finish by asking what evidence would change the interpretation.
Concept explained · BeginnerHow to Read a Price Chart
A price chart arranges observations over time. Read the instrument, interval, session, price scale and adjustment settings before interpreting its shape. Line charts, OHLC bars and candlesticks summarize the same market in different ways.
Concept explained · BeginnerInflation and Purchasing Power
Inflation is an increase in a general price level over time. It reduces how much a fixed amount of money buys. The inflation rate measures the pace of price change; a lower positive rate does not mean prices have returned to their earlier level.
Concept explained · BeginnerInterest Rates and Monetary Policy
An interest rate expresses the cost of borrowing or compensation for lending under stated terms. Central-bank policy influences short-term rates and financial conditions, while market rates also reflect maturity, credit, expectations and risk premiums.
Concept explained · BeginnerInvestment Fees and Expenses
Investment costs can include fund expenses, advisory fees, transaction charges, spreads and other implementation costs. Their effect includes both the money paid and the future growth that money no longer earns.
Concept explained · BeginnerVerification Before Trust
Investment fraud uses deception to obtain money, information or trust. Pressure, guaranteed high returns and unverifiable credentials are warning signs. Independent verification matters more than polished presentation, familiarity or a persuasive testimonial.
Concept explained · BeginnerOrders, Spreads and Liquidity
An order specifies how a broker should try to buy or sell a security. A market order prioritizes execution, while a limit order sets a price condition. Liquidity determines how readily trading can occur without a large price impact.
Comparison · BeginnerCap weight vs. equal weight
A market-cap-weighted index gives larger equity market values more influence under its methodology. An equal-weighted index resets constituents to equal weights at scheduled rebalances. Different weights can produce different returns from the same companies.
Theory explained · IntermediateModern Portfolio Theory
Modern portfolio theory evaluates investments as combinations of expected returns, variation and co-movement. Its efficient frontier contains portfolios that offer the highest modeled expected return for a given modeled risk, subject to the chosen assumptions and constraints.
Concept explained · BeginnerMorning and Evening Star Patterns
Morning and evening stars are three-candle formations traditionally interpreted as reversal candidates. They combine a longer first body, a small middle body and an opposite third body that penetrates the first. Trend context, gaps and completion rules matter.
Concept explained · BeginnerMoving Averages Explained
A moving average smooths a sequence by averaging observations over a rolling window. A simple moving average weights those observations equally. It describes past data and responds with a lag rather than revealing the future.
Concept explained · BeginnerPercentages, Points and Basis Points
A percentage expresses a proportion or relative change. A percentage point measures the difference between two percentages. A basis point is one hundredth of a percentage point. These units describe different calculations.
Concept explained · BeginnerPrice Return vs. Total Return
Price return measures the change in an investment’s price. Total return also accounts for distributions such as dividends or interest under a stated methodology. Neither number is complete without its period and assumptions.
Concept explained · BeginnerHow to Read Economic Indicators
Economic indicators measure particular parts of activity, prices or employment using defined methods. Interpreting a release requires its period, unit, comparison, revision status and uncertainty—not just whether its headline number rose or fell.
Concept explained · BeginnerRisk and Expected Return
Expected return is an estimate of possible future outcomes, often summarized as a probability-weighted average. Investors may require compensation for taking risk, but taking more risk does not guarantee receiving a higher return.
Concept explained · BeginnerRSI and MACD Explained
RSI and MACD summarize past price behavior using different calculations. RSI is a bounded momentum oscillator; MACD compares exponential moving averages. Their labels, crossings and divergences need stated settings and do not guarantee a reversal or profitable signal.
Concept explained · BeginnerSectors and Industries
Sectors and industries organize companies by business activity. A sector is a broad category; industries and sub-industries provide finer groupings. A market report’s sector results depend on the classification, universe and weighting used.
Concept explained · BeginnerSupport and Resistance
Support and resistance describe price areas where past declines or advances met a response. Analysts use these areas as reference points for interpreting later activity. They are observations and hypotheses about behavior, not barriers that prices must respect.
Concept explained · BeginnerReading Volume Alongside Price
Trading volume counts shares or contracts exchanged during a stated interval. Reading volume alongside price adds information about activity, but volume alone does not identify investor intent, distinguish every participant or establish the direction of the next move.
Concept explained · BeginnerTrends, Trendlines and Channels
Trend analysis describes the direction of a sequence of prices. Higher swing highs and lows describe an uptrend; lower ones describe a downtrend. Trendlines and channels organize selected reference points, with conclusions conditional on the interval and drawing rules.
Strategy explained · BeginnerValue vs. Growth Investing
Value approaches emphasize price relative to measures of business value or fundamentals. Growth approaches emphasize the potential expansion of a business. These styles can overlap, and neither a low multiple nor rapid growth establishes an attractive investment by itself.
Concept explained · BeginnerWhat Is a Bond?
A bond is a debt security. Its issuer borrows money under stated terms that may include interest payments and repayment of principal at maturity. Those promised payments are subject to the issuer’s ability to pay and the bond’s specific conditions.
Concept explained · BeginnerWhat Is a Drawdown?
A drawdown measures a decline from a previous peak to a later value. Maximum drawdown is the largest such peak-to-trough decline within a specified history. Its size depends on the series, dates and measurement frequency.
Concept explained · BeginnerWhat Is a Market Index?
A market index is a rules-based measurement of a selected group of securities. It summarizes a defined basket rather than every investment in the world, and its weighting and return rules shape the result.
Concept explained · BeginnerWhat Is a P/E Ratio?
The price-to-earnings ratio divides a share price by a stated earnings-per-share measure. It expresses how much market price corresponds to a unit of those earnings, but it does not establish fair value on its own.
Concept explained · BeginnerWhat Is a Stock?
A stock represents an ownership interest in a company. Its price is what buyers and sellers currently agree to exchange that interest for; ownership does not promise a dividend, a fixed repayment or a profit.
Concept explained · BeginnerWhat Is an ETF?
An exchange-traded fund pools investor money into a portfolio and issues shares that trade on an exchange. The wrapper tells you how it is held and traded; the holdings and strategy tell you what risks it takes.
Concept explained · BeginnerWhat Is Asset Allocation?
Asset allocation is the distribution of a portfolio among asset categories such as stocks, bonds and cash. It describes the mix of exposures before the selection of individual securities inside each category.
Term explained · BeginnerWhat is market breadth?
Market breadth describes how widely a market move is shared across a defined group of stocks. It looks beyond the headline index to ask how many stocks are rising, falling or meeting another stated condition.
Concept explained · BeginnerWhat Is Market Capitalization?
Market capitalization is a company’s share price multiplied by its outstanding shares. It measures the market value of equity, not the sticker price of one share or the total cost of acquiring the whole business.
Strategy explained · IntermediateWhat Is Momentum Investing?
Momentum strategies use past performance or trends as an input to portfolio decisions. Relative momentum ranks investments against one another; trend-following rules can compare an investment with its own history. The exact rule determines what is actually being tested.
Concept explained · BeginnerWhat Is Portfolio Rebalancing?
Rebalancing adjusts a portfolio toward a selected asset mix after market moves or cash flows have changed its weights. It is a method for maintaining exposure, not a guarantee of higher returns.
Term explained · BeginnerWhat is relative performance?
Relative performance describes how one investment or index performed compared with a stated benchmark over the same period. An absolute gain can still be underperformance if the benchmark gained more.
Concept explained · BeginnerWhat Is the Yield Curve?
A yield curve compares yields across maturities for a defined class of debt at a point in time. Its shape can reflect expectations about future rates and compensation for risk. A curve spread is evidence to interpret, not a certain economic forecast.
Concept explained · BeginnerWhat Is Volatility?
Volatility describes how much a measured price or return series varies. It is one way to describe uncertainty in market movements, but it does not capture every form of investment risk or predict the next move.
Concept explained · BeginnerBond Prices and Yields
For fixed promised cash flows, a higher required yield implies a lower present price, and a lower required yield implies a higher price. This inverse relationship is arithmetic; a real bond’s result also depends on credit, timing and contractual features.
Concept explained · BeginnerWhy Stocks Can Fall After Good Earnings
A stock can fall after strong earnings because its price reflects expectations about the future, not just the reported quarter. Results, guidance, valuation and what investors had already anticipated can point in different directions.
Worked example · BeginnerWhy can an index rise while most stocks fall?
An index can rise while most of its stocks fall when the stocks that gain carry enough weight to outweigh the decliners. The number of winners and their influence on the index are separate parts of the calculation.
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