According to a recent study, half of the small investors do not understand the financial tips of its financial adviser. Phrases such as “It is a portfolio very volatile for its risk profile, including funds of absolute return succeed lowering its Beta” sound like Chinese for more than one.
Lowering the Beta
The Beta is the risk indicator that reflects the sensitivity of a action to market fluctuations. With a Beta less than one, the action will tend to collect only partially market movements, it is more stable and talk about a “defensive value”.
Subprime Crisis
Problem credit of debtors of risk (people without income, or employment, nor property) in the residential market, which highlighted the shortcomings of a system based on mortgages garbage and was one of the triggers of the world economic crisis.
Portfolio Diversification of investment
Selection of values, titles, sectors and countries that do not have a very marked among themselves to reduce the risk that assumes the investor.
Investment Funds
According to what the experts said, “in the current economic environment, is the product more indicated for the investor, because they allow you to build a portfolio that maximizes the profitability without incurring high risks”.
Hedge Funds
Are funds at high risk that at the time were identified as one of the great guilty of the crisis by their speculative positions and that, during the last year, have staged a departure historic capital that has led to the disappearance of a large part of this industry. However, it seems that returning to regain its strength.
Profile of investors
Characteristics of the saver that determine their investments in terms of their expectations and its ability to assume the risk. The profile of most investors are conservative, more than 50 years, relying more on the financial institutions than in other sources to the choice of a product in which invest.
Rescue Plan
Injection of public money that are carrying out the governments of various countries for the revival of their national economies.
Threshold of the 10,000 points
Psychological Level of quotation of the Bag, in case of lowered or overcome, provokes strong states of encouragement. During these days can either, prevail in the unrest, either, the euphoria among investors.
Volatility
Parameter that serves to measure the risk of price of the financial assets in terms of fluctuations or variations in price over a period of time.
Know this terminology we may be useful to understand the financial solutions of your adviser and see if they are adapted to our needs, as well as able to understand any explanation that it will give us on the situation of our investment portfolio.
Tags: Financial Adviser, Financial Solutions, Financial Tips, Hedge Funds, high risks, Investment Funds, investors, Portfolio Diversification of investment, Profile of investors, Rescue Plan, world economic crisis