I’m in the midst of teaching a Corporate Finance class for MBA students at a local university. Some of the concepts, although rather complicated, have important real world applicability. One of those uber-important concepts is, NET PRESENT VALUE (NPV). It is a method to put a dollar amount on future cash payments. It’s great if you win the lottery and want to determine whether to choose the lump sum payment or monthly option. Or what if you or your folks want to determine the present value of…

Yet, the anomaly rebuffs the efficient market theory and shows that small cap stocks and value stocks, over decades, tend to outperform the overall stock market.

Investing is Risky The Investments class I teach at a local university focuses on investing risk and return. We talk about the risk that you’ll lose money if you invest and your stock and bond funds decline in price. There’s also the risk that your purchasing power will erode from inflation. According to a recent Fortune-CNN article food prices increased 2.6% last year. Although, in my region, it seems as though the food increases were quite a bit more. Although the CPI (consumer price index)…

In talking with a book editor the other day, he explained to me that the best selling books were about trading options and market timing. He said, basic personal finance books were not selling well. I was so distressed with that information because basic and simple investing strategies lead to greater investment success than fancy market timing and trading strategies.

Wise asset classes allocations boost long term returns. A 7% long term return is possible.