What is the financial market?

Let's first look at the cumbersome, hard-to-understand, and incomprehensible definition provided by Baidu Baike, which laymen simply cannot grasp:

The financial market, also known as the money market, includes the money market and the capital market, and is a market for the allocation of funds. The so-called fund allocation refers to the activities of both the supply and demand sides of funds using various financial instruments to regulate the surplus of funds during the economic operation process, which is the general term for all financial transaction activities. Various financial instruments are traded in the financial market, such as stocks, bonds, savings certificates, etc.

This term is a more rigorous and formal explanation on the encyclopedia, but if we explain to a layman or a newcomer what finance is, even if you explain it to him ten times, he will still be confused. Below, we will analyze "finance" from the root:

Looking at the two characters of "finance" alone: "Jin" refers to funds, to be frank, it means money; "Rong" refers to financing, which means borrowing money. Therefore, the definition of finance, the essence of finance, to be frank, is borrowing money. You may wonder if finance is not a bank? Isn't it a securities company? Isn't it very complicated? In fact, it's not! The financial industry is currently mainly divided into three parts: banks and other lending institutions, securities institutions, or insurance institutions. Borrowing money is the essence of finance, and banks and securities companies are just financial business institutions. To be precise, both banks and securities companies are engaged in borrowing money. Don't look at the complexity of bank business, its core is borrowing money! Don't look at the complexity of securities company business! The essence of its core business is also borrowing money!

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Therefore, remember: finance is about borrowing money! People who work in finance are doing the business of borrowing and repaying money!

So here is a word of advice for those who want to get started: when getting started, think about which direction to develop:

All people in the financial industry are a small worker in this money transfer link. Understanding the financial market is to understand the roles of various financial institutions in it, and then study the various tools in the financial market, such as bonds, stocks, options and futures, foreign exchange, swaps, etc. Learning these financial tools can help you understand how to transfer money better, faster, and more accurately.

Finance connects these benefits and risks through financial means such as buying and selling, agreement trading, and risk mutual insurance, or adjusts the original connection relationship. Therefore, in the financial field, you need to "know the reason why" for the various financial tools mentioned in the third point, understand the theory, but also be more practical.

Some people may think, isn't stock also finance? How is borrowing money realized? Here is an example of stocks. As we all know, the shares issued by a company when it goes public are called stocks. So when a company goes public, you can buy the company's stocks. At this time, you use the money in your account to buy stocks. After the money is spent, the stocks enter your account, which means your money has turned into stocks. Where did your money go? In fact, your money has been given to the listed company for their production and operation, and the stocks they give you (issue) are like IOUs.How to delve into the study and understanding of finance?

Finance is actually a vast system, and here are some of the most core financial books recommended for you to build a comprehensive and systematic framework of financial knowledge.

Similarly, a one-sentence summary: It is best to start with basic textbooks on monetary banking/finance/financial markets.

Beginner level:

① "Macro and Micro Economics" also known as Western Economics:

Many people truly understand Western economics starting from Mankiw's "Principles of Economics" because it is interesting and easy to understand. The "Top Ten Principles of Economics" are impressive. When I studied Samuelson's economics, it felt like economics was a rigorous old scholar. Reading Mankiw's was different, like a friend who can tell stories. Even if you are not in the financial industry, I believe you will like it. This is definitely a book that is hard to put down once you pick it up. If you study finance, it is estimated that few people do not read this book.

② "Monetary Banking":

Mishkin's "The Economics of Money, Banking, and Financial Markets" has several editions with little difference, and both Chinese and English versions are available. It is a must-learn textbook for undergraduates majoring in finance, and it is generally set as a course called "Monetary Banking" in universities.

③ "Financial Market Theory"

④ "International Finance"⑤ "Investment"

Advanced:

"Advanced Macroeconomics," "Econometrics," "Options Pricing," "Financial Engineering,"

Mathematics-related books or books on the history of finance ("Currency Wars")

Technical Category:

"The Adam Theory"

"Dow Theory" (a must-read for stock trading)

"Financial Alchemy"

"Elliott Wave Theory"

"Technical Analysis of the Futures Market""Japanese Candlestick Charting Techniques"

"Principles of Professional Speculation"

"Elliott Wave Theory" (Essential for Stock Trading)

For now, these books are recommended. The key is to focus on understanding rather than quantity, and to form your own framework in your mind.

For financial certifications:

Professional Category:

- Bank Qualification

- Securities Qualification

- Insurance Qualification (divided into brokerage, appraisal, and agency, with agency being the easiest), Futures Qualification

Wealth Management Category:

- Financial Planner AFP, Certified Financial Planner CFP (an advanced version of AFP)

Insurance Category:

- (This category was not completed in the original text, so it cannot be translated.)Life Insurance Managers, Life Insurance Financial Planners, Employee Benefits Planners (these three are three different directions of the same exam), Fellow of the Institute of Actuaries (FIA), Fellow of the Society of Actuaries (FSA) (synonymous with "tall, rich, and handsome" in this context)

Securities Investment Category:

Securities Broker Qualification Exam, Chartered Financial Analyst (CFA), Certified International Investment Analyst (CIIA), Sponsor Qualification (the latter three are also synonymous with "tall, rich, and handsome")

Risk Category:

Financial Risk Manager (FRM) (synonymous with "tall, rich, and handsome", and there is also a Chinese version CFRM)

Professional Support Category:

Certified Public Accountant (CPA), Association of Chartered Certified Accountants (ACCA) (synonymous with "tall, rich, and handsome"), Certified Internal Auditor (CIA), Legal Professional Qualification Certificate (referring to the judicial examination), Certified Property Valuer (CPV), Real Estate Appraiser, Land Appraiser, etc.

Other Notes:

1. Master Excel and become proficient in using data websites

No matter which sub-industry of finance you enter, the basic work is essentially collecting data, organizing data, and analyzing data. The financial industry involves a lot of statistics, financial reports, data, etc., so please learn and use Excel well. If you are not heading towards financial engineering, you may not need to learn VBA or just have a basic understanding. However, you must be proficient in basic operations and functions. Excel has many powerful features, and being proficient in using it will definitely make you popular in this field. The method is to visit forums where industry professionals discuss, download their spreadsheets, understand the functions and logic behind them, and also, PowerPoint is very important.2. Pay attention to financial media and read more financial magazines

Mainly, it's about having conversations within the industry, and also gaining a lot of knowledge through osmosis. Once you understand the terminology, market rules, and industry characteristics, you can read magazines, journals, and financial websites to further perfect your knowledge framework and accumulate knowledge capacity.

Here are some recommended periodicals that I would like to share with everyone:

Firstly, "First Financial Weekly," "21st Century Economic Report," and Bloomberg's "Businessweek/Chinese Edition" are entry-level, lightweight, and suitable for non-professionals in financial popularization magazines;

Additionally, "Finance and Economics" magazine and "Caixin Weekly," the latter of which was founded by Hu Shuli after leaving the finance team, is an impressive financial editor-in-chief, and those interested can search on Baidu (96.430, +5.71%). (These two magazines are more serious financial publications, reporting on events or subjects with a certain social impact, and the industry evaluation is that "Caixin" is slightly better);

There are also "Value," "Money+," and "Harvard Business Review," which follow the thinking of foreign media and are worth reading;

For those who like securities, the three major securities newspapers, "China Securities Journal," "Securities Times," and "Shanghai Securities News," are indispensable.

You can also download apps.

Above all, I still recommend traditional media for friends in finance or those preparing to get started to read more. Unlike today's fast-paced internet culture, every basic concept, expert comment, or industry analysis here is worth pondering and can be directly applied by you.

Regarding financial websites to share:1. Domestic financial news websites:

Hexun, Eastmoney, major portal websites (Tencent, Sina, NetEase, Phoenix) financial channels

And the aforementioned magazines all have corresponding websites

2. International financial websites:

The Wall Street Journal, Financial Times, Reuters Finance, Bloomberg Finance, etc. Those who are not proficient in English can read the corresponding Chinese websites, but the quality is relatively lower compared to the original English websites.

3. Financial forums, etc.:

Renowned forums such as Zhihu, Tianya, and Douban have financial topic sections, as well as professional financial forums like Xueqiu, where many experts gather. Spending time there can teach you a lot of valuable information.

4. Government websites:

China Banking Regulatory Commission (CBRC): Regulates trust, banks, and other financial institutions

China Securities Regulatory Commission (CSRC): Regulates securities, funds, and other financial institutionsPeople's Bank of China: Releases some key messages

Bureau of Statistics: Publishes statistical data

5. Association Category: Banking Association, Securities Association, Fund Industry Association, Trust Industry Association, etc.;

6. Special Reminder: Pay more attention to big Vs in the financial circle, such as: Cao Shanshi, Tianjin Stock Knight, Ye Tan, Mr. Sun Ning, and Stock Doctor!

There are many financial big Vs, to organize fragmented financial information into effective information, you must first pay attention to the accumulation of quantity, so the amount you read must go up first, otherwise, don't talk about understanding and application.

The basic idea of financial learning is just like this, I hope friends who are interested in finance can break through their own sky!