**Finance** is a field that reasons about the allocation of assets and liabilities over time under conditions of certainty and uncertainty. 

One of the main principles of finance is **the time value of money** which states - in the absence of inflation/deflation - that the present value of future cash-flows is discounted (or in other words, there is more value of money at present than in the future). Another very important principle is **the risk-return tradeoff** which says that "more risky projects should have more return" in the efficient economy. Both of these principles are challenged by reality and practice. The era of quantitative easing[[QE]] brought negative interest rates, for instance, in some European countries, while  **the time value of money** assumes positive interest rates. As for **the risk-return tradeoff**, the definition of risk has more [dimensions](/nodes/617) to it than just typically assumed volatility.

**Finance** can be broken into three different sub-categories: public finance, corporate finance and personal finance. For more details, see [[Finance]]

Financial economics[[Fin economics]] is the most relevant field for understanding financial markets. In particular, modern portfolio [theory](/nodes/617) and option pricing (Black-Scholes-Merton theory [[bs]] and its developments) are major achievements of financial economics which allow to make decisions under uncertainty.

## Collection of papers

[Investment Resources](https://brianlangis.wordpress.com/investment-collection/) Brian Langis Eclectic Musings & Observations  
> The best thing a human being can do is help another human being know more. – Charlie Munger
> Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain.


[Links: Michael J. Mauboussin](https://hurricanecapital.wordpress.com/2015/02/01/links-michael-j-mauboussin/)

## Investing Books

[The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing) by Marks, Howard 2011](https://www.amazon.com/Most-Important-Thing-Thoughtful-Publishing/dp/B00BXUFRAE/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=&sr=)

[The 80/20 Investor: How to Simplify Investing with a Powerful Principle to Achieve Superior Returns](https://www.amazon.com/80-20-Investor-Investing-Principle-ebook/dp/B01C8DT4IK)  by David Schneider

[Market Mind Games: A Radical Psychology of Investing, Trading and Risk](https://www.amazon.com/Market-Mind-Games-Psychology-Investing/dp/0071756221) by Denise Shull