A column for anyone who has ever nodded along in a financial conversation without understanding a word.
After many years in the financial industry, I have always been intrigued by the thought process behind investment decisions. Many people well-versed in the industry use different criteria to manage their savings and investments. But what about those with no experience in finance and capital markets?
Over the years, I have heard people seeking higher teen returns (returns above 15%) when the benchmark rate is in the mid-single digits. They often sound overconfident, making what, at first glance, seem like rational, informed arguments. More often than not, after a few basic questions, I realize they don’t even know what a benchmark rate is, let alone what rating agencies, credit risk, or liquidity risk are.
If you are in the first category, savvy financially and with experience in capital markets, this column is not for you. If you identify with the second, I recommend keeping reading. Full disclosure: This is not, and never will be, investment advice. The goal is much simpler: to provide the context you need to ask the right questions before making financial decisions, and to try to bring some sense to what is a very complex industry.
If you are still reading, you probably fall into the last category, and trust me, you’re not alone. Many people understand very little, if anything, about financial markets and economics, and there is no shame in that; the only shame is staying in the same lane and continuing to make poorly informed financial decisions.
You’ll find two sections here. The Compass is where we start: financial fundamentals, clearly explained, no experience required. The Signal is where it gets interesting: financial knowledge just a few outside the industry have, insights typically reserved for the ultra-high-net-worth clients of the most sophisticated private banks in the world.
After many conversations with friends, family, and colleagues, and much internal reflection, I have finally decided to embark on this new endeavor. As noted earlier, the goal is to provide easy-to-read, non-technical publications that offer context to strengthen your financial decision-making.
I’m hoping this becomes a conversation. If you find this account useful and would like me to write on other interesting topics, leave a comment below.
A word of prudence: this is my first post, if that’s the name. To be absolutely honest, I’m also learning about Social Media and Substack, so bear with me if I don’t reply quickly. I will do my best to become fluent in this technology over time.
Best,
Alex