Explanation of technical terms during the investment
Especially in this time of great fluctuations on the stock market. It's interesting to look at this. I wanted to take you in my experiences and experiences at the fair, during the corona crisis. I will first give you some explanation about the common concepts of investing. This article was already on the shelf to write, but has now been put forward.
For people who want to start with #beleggen or just working, it is sometimes difficult to know what the technical terms (concepts) of investing mean. That's why you will find below a #begrippenlijst with the most common and important concepts per category. The #begrippen are explained in a short and understandable language. The following categories will be offered:
- Personal data
- Power titles
- Types of shares
- The cost
- Revenue (premium)
The personal data
You have decided at which (internet) broker or #bank you are going to invest and sign up. The #broker or bank wants to know some things about you before you can invest with them. They need to be sure (duty of care) that you know what investing means (what the risks may be). Furthermore, it is important to know what you invest for (a specific purpose) and how long you want to invest.
- Customer profile: everything recorded in a file. The bank or broker must be able to prove that they have complied with the duty of care. A customer profile includes: age, address details, investment horizon and whether you have experience. In most cases you have to do a test, if you have so many questions right you can invest. The results are in the file.
- Duty of care: the duty of care is that a broker and bank has to tell you the risks of the various products. The AFM checks whether they comply with this.
- Investment horizon: that is the time someone wants to invest.
- Risk profile: it looks at your financial background (income, expenditure, wealth and how it will be in the future). You should always invest with money you don't need now and later. On the basis of those points, the risk of a person may be at risk. This also determines where someone better to invest or not.
- Risk experience: how do you react to a possible slight and a large decrease. Are you sorry, or are you all eating up that you lost money?
- Risk tolerance: the risk that someone can or cannot bear by investing.
- Objective capital goal: a goal that must be achieved, for example, the repayment of the mortgage.
- Subjective wealth goal: a goal that someone wants to achieve is not possible, it is less bad.
