Matt Krantz

If you’re like most people, you probably figure investment banking got its start in a towering office skyscraper in New York City. But the real story of the origin of investment banking is far less metropolitan, yet arguably even more interesting. Investment banking traces its roots to the age of kings and queens.

The IPO (Initial Public Offering) still remains one of the pinnacles of what a company can achieve in its early life. When a company sells stock to the general public for the first time, it’s a sign that the company has a compelling enough story that it can attract outside investors to buy a piece of the company.

Mergers and acquisitions (M&A) is a key function of the investment banker. When companies get together and combine, which happens during mergers and acquisitions, the terms of a deal usually are straightforward. Typically, a larger company is looking to bolster a part of its business.The company could hire a team of people to build that company from scratch, pairing up researchers to design the product, finance people to price it right and control costs, marketing people to whet the consumers’ appetite, and operations people to get the product.

Investment bankers spend a great deal of time constructing financial models on spreadsheets and manipulating them to arrive at values for companies, divisions, and potential projects. These models are often very complex and involve many assumptions and inputs. This article provides some ideas on how investment bankers can improve their analyses and deliver greater value to clients.

If the thought of being completely on your own as an online investor makes you nervous but you’re not willing to give up low-cost commissions, the discount brokers sit in the sweet spot for you. These brokers suit most investors ranging from beginners to the more advanced because they generally offer some advice (if you ask for it), and many have offices in most major cities.

The deep discounters are the Walmarts and Home Depots of the brokerage world. When you sign up for a deep discounter, you are on your own. But if you know what you’re doing, that’s a good thing because you don’t have to worry about getting pestered by a salesperson trying to pitch stocks you have no interest in.

Investors are on a constant quest for the best online broker. But just as different headphones, cars, and strollers fit different people’s needs, the same is true with brokerages. Investors have different goals, taste for risk, and resources. And that’s why one person’s broker can be perfect for him or her, but completely wrong for you.

Just about any company you can invest in must follow financial reporting rules. That includes companies that are publicly traded. But even some private companies, which haven't sold stock, must provide some financial information if they have $10 million or more in assets and have 500 or more owners.Most major stock market exchanges, including the New York Stock Exchange and NASDAQ, require their listed companies to provide quarterly and annual financial reports to investors.

Like index investors, investors who use technical analysis shake their heads in disapproval when they see fundamental analysts carefully examining spreadsheets and financial statements. They, like index investors, see all the effort that goes into fundamental analysis as a waste of time and calculator batteries.