Investment theories are frameworks that help investors understand how to allocate their resources effectively. These theories, such as the Modern Portfolio Theory and Capital Asset Pricing Model, provide insights into risk and return relationships, guiding investors in making informed decisions about their portfolios. Another important concept is the Efficient Market Hypothesis, which suggests that asset prices reflect all available information, making it difficult to consistently achieve higher returns than the market. By studying these theories, investors can develop strategies that align with their financial goals and risk tolerance.