Chapter 1 of 22 · Unit 1 · Foundations · 5 min read
Beginner path: read to Level 4 · Series 65 path: read to Level 4 · CFA path: read to Level 4
After this chapter you can
The series starts with the overview article, which walks through the 11 asset classes in plain words. Read that first if you have not. This chapter explains how the 22 chapters behind it are built, so you can decide how far down each one to go.
For every reader: the idea in plain words, no formulas.
Most people learn investing from products: a fund a friend owns, a stock in the news, a savings rate at the bank. We start one step back. Each chapter takes one idea, such as risk, probability, bonds or options, and explains it in ordinary language before any formula appears. A reader who stops after the first two levels of every chapter has a complete beginner course. A reader who goes all the way down has covered the material that the Series 65 exam and the CFA curriculum expect.
The overview article is step zero. It names the 11 classes, from US stocks to cash, and gives each a job, a set of risks and a short history. The chapters here go deeper into the ideas that article uses without explaining: why a bond loses value when rates rise, what a standard deviation measures, how the Federal Reserve sets short rates. Each class in the article now ends with a link into Chapter 20, which takes the 11 classes one at a time and lists what moves each of them.
Nothing in the series is advice for your own money. We explain how markets and instruments work and show the arithmetic. Your goals, taxes and time horizon belong to you, and a decision about them needs someone who knows your whole situation.
For readers who want the mechanism, with the diagrams.
Every chapter has the same four levels, always in the same order.
You go deeper by scrolling. A small badge on a level heading tells you where your path stops, and a contents box near the top of the page lists every section so you can jump.
Above the first level, a progress line gives the chapter number, the unit and how many minutes the chapter takes. Under it sits a box of outcomes: what you should be able to do after reading. After Level 4 come three short sections. Sources lists who published each figure. Gaps lists what we left in words. Terms defines every glossary word the chapter uses, and those definitions feed the glossary page.
We built three paths through the same pages. The Beginner path reads every chapter to Level 2. The Series 65 path reads to Level 3 and adds the rules chapters of Unit 8. The CFA path reads everything. You can switch at any time; the Beginner path page, the Series 65 path page and the CFA path page list every chapter with links to the level where that path stops.
At the bottom of each chapter you will find Previous, Series home and Next. Chapter 1 links back to the overview article, and the last chapter tells you it is the last. Inside a chapter, a word with a dotted underline is a glossary term: hover or focus it for a short definition, or tap it on a phone to open the glossary. The Go deeper boxes at the end of each level point at sections of other chapters that take the same idea further.
For Series 65 and CFA readers: formulas and worked examples.
When a chapter quotes a number from an example, a program computed it from inputs we state in the sentence, and the build of the page reruns that program. Ten thousand dollars left for thirty years at 7 % a year grows to $76,123; that figure comes from the formula below, evaluated when the page is made. If we change an input, the number on the page changes with it, and a test checks the important ones.
In words, the future value equals today's sum multiplied by one plus the yearly rate, once for every year.
Each displayed equation is followed by a sentence that starts with "In words". That sentence is the formula read aloud, so a reader who skips the symbols still follows the argument, and the help chat on the client portal indexes it. The formula sheet collects every labelled equation from all 22 chapters with its sentence.
A number that comes from a published series, such as an unemployment rate or a Treasury yield, names who publishes it and the date we took it. Diagrams built from data have a "Show the numbers" table under them with the same source line. When we could not find a figure we trust, we describe the idea in words and list the missing number in the chapter's Gaps section, near the end of the page. We would rather leave a gap than print a guess.
For readers who want past episodes run through the Level 3 math.
Beginner path stops hereSeries 65 path stops here
Level 4 of each chapter takes real episodes, such as the 1973 oil embargo, the 1987 crash or the 2022 rate rises, and runs them through the math from Level 3. Each one sits in a card with its year, and every card also appears on one history timeline that runs from the 1720 South Sea bubble to the last few years.
1987 A day the normal curve could not explain
On 19 October 1987 the S&P 500 fell 20.5 % in one session. Chapter 3 compares that fall with the size of a normal day and shows why a bell curve called it next to impossible. We use it here as a sample of what a history card does: it opens with the event and the date, then hands the reader to the chapter that does the arithmetic.
We pin dates to a short list checked against the publishers (the NBER for recession dates, the Federal Reserve for policy rates, the exchanges for index closes). A figure we cannot tie to a publisher stays out of the sentence and goes to Gaps in words. When two sources disagree, we name the one we use. Past episodes show what has happened; they do not tell anyone what will happen next.
None.
Educational only. Not investment, tax, or legal advice, and not an offer of advisory services. InnovationStrat Wealth, LLC is not yet registered as an investment adviser.