Investment Tutorials: Learning Capital Flow Analysis: and Investment Theory

Analysis of Federal Reserve Flow of Funds Accounts

Investment Theory: Learning Capital Flow Analysis (Investment Tutorials)

The Federal Reserve national flow of funds accounts have data that reveals money flows that drive stock and bond prices.

This site helps you learn Capital Flow Analysis methods to interpret this data and predict market turns.

A commonsense technique.
No advanced math.
Self-paced learning.
Free tutorials.
An open program; no registration.

This site has extensive educational resources that teach the techniques of Capital Flow Analysis.

These courses are free, but mastering the subject takes time. The training modules comprise 112 pages, with 158,000 words. Reading takes from 11 to 18 hours.

The payoff is an enhanced ability to understand and predict market trends.

Start With The Short Course

The best place to start learning Capital Flow Analysis is the six minute overview of Capital Flow Analysis presented in this one-page introduction:

: Capital Flow Analysis in a Nutshell

This will gives you an idea of the principles of Capital Flow Analysis.

Next, learn how Federal Reserve flow of funds accounts provide the 'big picture' on the players and instruments that make up the U.S. capital market, in this two-page summary:

: The Big Picture

You can cover these two introductory modules in less than thirty minutes.

For Professional Competence, Take The Full Course

To become an expert in Capital Flow Analysis, you should complete all the training modules. You can do this at your own pace.

Go the full course for competitive advantage and enhanced predictive skills

For professionals and serious investors, knowledge of Capital Flow Analysis gives an edge over those who still believe that market risk is systemic and unexplainable.

However, this knowledge cannot be had without effort.

The Training Modules Summarized

Here is a summary of the seven training modules.

Click on the icons to start learning Capital Flow Analysis.

The Learning Modules: Capital Flow Analysis
Module	Description	Reading Time
	CFA in a Nutshell: A quick overview of the method and how it helps you manage your portfolio.	4 to 6 minutes 850 words. 1 page
	The Big Picture: A top level explanation of how flow of funds accounts portray supply and demand in the U.S. capital market.	15 to 23 min. 2,000 words. 2 pages
	CFA: The Basics: The fundamentals of Capital Flow Analysis explained in simple terms.	1 to 1:40 hrs. 15,400 words. 10 pages
	CFA: The Themes: Recurring historical, sociological, and demographic themes that are relevant to Capital Flow Analysis	3:21 to 5:40 hrs. 52,300 words. 26 pages
	CFA: The Steps: A hand-holding tutorial that leads you, step by step, using resources on this site, through the process of Capital Flow Analysis	5:24 to 9:09 hrs. 76,700 words. 63 pages
	Reading The Tables: An explanation of how to use the color-coded flow of funds accounts published on this site.	15 to 23 min. 3,500 words. 4 pages
	Equity Values: A description of some metrics used to judge the reasonableness of equity prices.	31 to 49 min. 6,900 words. 6 pages

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The Seven Training Modules:

Why Learn Capital Flow Analysis?

Capital Flow Analysis uses Federal Reserve flow of funds accounts to explain supply and demand for securities.

These techniques go beyond and supplement Modern Portfolio Theory.

Capital Flow Analysis teaches that much of market risk is not random but caused by capital flows that can be understood and explained.

Many Wall Street professionals are unaware of the methods taught here.

Capital Flow Analysis Insights

Capital Flow Analysis provides insights on using Federal Reserve flow of funds accounts to explain market supply and demand.

Capital Flow Analysis is a pragmatic technique that reveals the basic forces that drive the markets.

This knowledge is a rational basis to predict price trends.

A Little-Known Discipline

John C. Dawson, editor of 'Flow of Funds Analysis', wrote,

'It is possible that many economists -- especially those of recent vintage -- will hardly have heard of flow-of-funds analysis and will hardly understand social accounting to be a discipline within economics.'

In 2005, there was only one text on flow of funds analysis, published by nobel laureate W.E. Sharpe, but even this book does not relate flow of funds accounts to security price trends.

The principles of Capital Flow Analysis were first published on this web site in October 2004.

About the author

These learning modules were written by John Oswin Schroy, and are based on practical experience in capital markets.