Taught by Professor Connel Fullenkamp of Duke University, these 12 lectures introduce the impressive range of financial markets, including stocks, bonds, futures, options, real estate, private equity, and virtual assets, while also looking at the markets for intangible assets, executive talent, and ethical investing. Filled with practical tips, the course is aimed at the ordinary investor.
Understanding the World of Financial Markets
Look before you leap into the market. Investigate stocks, bonds, options, virtual assets, and other financial markets with a seasoned professional.
Overview
About
Connel Fullenkamp is a Professor of the Practice of Economics at Duke University. He received his PhD in Economics from Harvard University. He has won multiple teaching awards during his career, including Duke’s highest honor for undergraduate teaching. He also does consulting work for the International Monetary Fund Institute for Capacity Development, training government officials around the world. He has published more than 20 articles in academic journals, and his op-eds have appeared in Newsweek and The New York Times.
Trailer
01: The Property Market
Start the course with one of the oldest forms of investment: property. Weigh the pros and cons of buying a home, not just as a residence but as an asset that will grow in value. Consider such strategies as purchasing rental properties versus REITs, “flipping,” and tapping home equity. Assess the return on holding a house for a decade or more compared with a similar investment in stocks.
27 min
02: The Stock Market
Evaluate two approaches to investing in the stock market: stock picking, which can verge on high-risk gambling as in the notorious GameStop “short squeeze” in 2021, and the safer strategy of buying and holding a diversified portfolio of index funds. Learn how the efficient market hypothesis sheds light on investor behavior by modeling the flow of information about individual companies.
26 min
03: The Market for Intangibles
Brand names, patents, secret formulas, logos—these and other entities are known as intangible assets, and they can add greatly to a company’s value. This not only applies to prestige brands, but also to firms such as Walmart that are exceptionally well-run, which counts as an intangible asset. Keep this all-important concept in mind whenever you are gauging the strengths and weaknesses of a company.
26 min
04: The Bond Market
The age-old strategy of holding bonds as a hedge against declining stock prices appeared to go haywire in the decade and a half following the 2008 Financial Crisis. What went wrong and why? Investigate the function of bonds and their link to fiscal policy. Look at alternatives to the traditional bond market that combine relatively low risk with returns that are greater than the rate of inflation.
25 min
05: The Market for Talent
CEO compensation can be shocking, but the millions paid to a top-notch chief executive can generate billions to the economy, not to mention a tidy return to stockholders. That’s why understanding a company’s CEO is as important as mastering its balance sheet. Study the starters and nonstarters among CEOs—and look at CEO types, such as the thin-skinned founder, the one-trick pony, and the empire builder.
25 min
06: The Futures Market
The futures market has a practical function of allowing a company to lock in a price for a vital commodity or asset to be used later, for example, natural gas. It also has a speculative side, enabling investors to hedge their portfolios against market downturns or to simply gamble on price fluctuations. Learn when it makes sense for an individual investor to venture into this risky market.
23 min
07: The Market for Fear
Warren Buffett said, “Be fearful when others are greedy and greedy when others are fearful.” But how do you measure fear? Financial economists have come up with volatility indexes that measure the tendency of stocks to vary in price over time. The VIX index is based on the S&P 500 and captures the “fear factor” in the market. Discover how to use VIX to help manage your investments.
25 min
08: The Options Market
Options give the holder the right to buy or sell a particular asset at a fixed price on or before a certain date. Unlike futures contracts (discussed in Lecture 6), options don’t commit the holder to actually buy or sell anything. What could go wrong? Lots, as you learn in this lecture, which contrasts well-planned options trading with the “throw-of-the-dice” approach that often leads to disaster.
24 min
09: The Private Equity Market
Companies typically start out private and go through a period of growth before potentially going public through an initial public offering (IPO)—though not all firms take this path. Many companies remain private or are taken private through buyouts. This process is central to the private equity market, a thriving sector of the economy that largely excludes individual private investors.
24 min
10: The Market for Good Behavior
We would all like companies to act responsibly, but how effective are ESG (environmental, social, and governance) financial instruments, which are designed to reward good behavior and punish bad? Delve into this relatively new array of securities that often have conflicting standards and goals. Compare ESG mutual funds with ESG bonds. The latter may be better targeted for doing good.
27 min
11: The Virtual Assets Market
Venture into the brave, new world of virtual assets: cryptocurrencies, stablecoins, non-fungible tokens (NFTs), and the distributed ledger databases that make them possible—the best-known being blockchain technology. Learn how they work and weigh the advantages and risks of these revolutionary financial instruments. Consider whether the time is right for you to jump into the market.
26 min
12: The Market for Markets
“There’s no free lunch,” which for the stock market means that everyone on Wall Street must get paid one way or another, especially in the era of brokerless trades and other freebies. Analyze the hidden fees in today’s computerized market. A notable source is high-frequency trading, which skims a fraction of a cent from each share traded, affecting even passive investors.
30 min
