Vocabulary and further resources

For a book with concise coverage of the essentials of personal finance, read The Index Card by Helaine Olen and Harold Pollack. (If you want to read it, click here then click "download" on the right side of the screen.)

Preet Banerjee’s YouTube channel has a series of short videos which explain investing step by step in basic terms, and I recommend those linked in this playlist. Videos 9 and 12 are skipped deliberately, because they contain descriptions that don't apply to the investment vehicles in this guide.

At a higher level of difficulty, The Plain Bagel is a channel that covers many investment topics with great clarity.

Ben Felix's channel has an unusual level of technical explanation, while still being very accessible. He provides extensive scholarly citations to support his views on investing. His video on factor investing is linked in the portfolio section as the best explanation of those concepts. He also co-hosts a podcast called The Rational Reminder, where he interviews experts or explores the evidence on a variety of investing topics. Click here to see a video in which he outlines the basics of investing according to his views.

These three YouTubers are Canadian financial professionals, but nearly all of their advice applies universally. Many of their videos are linked throughout the guide. Patrick Boyle, a quantitative trader and hedge fund manager based in London, has a great YouTube channel as well. His style of investing is far different than the one advocated in this guide, but his videos provide very informed (and funny!) commentary on current events and important issues in financial markets. In addition to those, I recommend this playlist of his lectures on portfolio management.

The website Portfolio Visualizer provides an effortless means of backtesting various asset class allocations. For example, you can compare the returns of US small cap value stocks vs. a US cap-weighted index since 1972. On a more advanced level, you can use this part of the website to test what exposure to different factors a given fund has achieved by simply typing in its ticker symbol and selecting the Fama-French five-factor model (or other models like the AQR model if you're interested). Be aware that the factor regression is valid only for funds that invest in US stocks.

The Research Affilates website has a section which estimates expected (excess) returns of various factors based on relative valuations. Research Affiliates is the organization that creates RAFI indices.

Terms are ordered roughly from most basic to most advanced. Many of the links lead to the term’s Investopedia entry. Someone who has read this document and understands these concepts is probably ready to start carefully investing. Deep mastery is not always necessary: if you haven’t yet understood every nuance of bond pricing, that is fine. But before you invest in a long-term bond ETF, you should understand the chief influences on the fund’s value, which includes knowing that the share price will dip if interest rates rise.

Vocabulary and further resources

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