Author: Elizabeth Shaw

What is firm-foundation theory? How is it different from castle-in-the-air theory? How do they differ and which is the best stock valuation method? There are two primary stock valuation methods. Firm-foundation theory states that assets have an “intrinsic value” based on the value of current dividends and estimated potential in the future. The idea here is that the stock will always regress to the intrinsic value. The castle-in-the-air theory has a different approach, stating that a stock is worth what people are prepared to pay for it. Keep reading for an in-depth look at firm-foundation theory and castle-in-the-air theory.

What does a fundamental analysis of investing options involve? Does this method of stock valuation work?  Fundamental analysis is a method of stock valuation that uses in in-depth study to determine a stock’s value.  Fundamental analysis of investing options takes into account a number of factors in addition to past price movement, including revenues, growth rate, and management skills.  Find out more about fundamental analysis and investing below. 

What is the smart beta strategy? Will this approach help you make better investment decisions? The smart beta strategy is one of the most influential methods of portfolio construction. Building on previous investment theories, the relatively modern smart beta strategy promises to yield greater returns than the market without an increase in risk. Keep reading for more about the smart beta strategy.