Uncorrelated assets lower the investment risk. Let’s see what correlation and diversification mean for a moment. Correlation between 2 assets In finance, correlation is the relationship with which 2 investment instruments move. The correlation varies between +1 and -1.+1 means that the instruments move in the same way.-1 means that the instruments goes in exactly […]
Month: October 2022
Risk and Investment Funds
Put money into investment funds reduces the risk, Always. Why? Let’s look at the types of risks involved in investing in an asset and why diversification helps. Risk Risk refers to the possibility that the actual return of an investment differs from its expected return. There are two types: The risk premium for diversifiable risk is […]
Why invest in financial instruments?
You have to invest in financial instruments. Why?Now we see it. First of all, why do people invest?To increase the capital over time, but above all not to lose it.I think you know it, but central banks are aiming for 2% inflation to keep the economy enticed to grow. Why 2% and not 30%? It […]
The concept of investing
The concept of investing can be summarized in “allocating a resource, so that it can have a return in the future” .Simple and straightforward end of the post. Ok, that’s not true, it’s not that simple. Everything is investing I can allocate various resources, money, time, know-how and receive others in return.Examples of different investments: […]
Where to spend your Dolce Vita?
What is the Dolce Vita?It is a life of heedless pleasure and luxury And that’s what we should expect if we become financially independent, perhaps already at 40, 45 or 50. Or maybe not 😕. See here to understand what you need to calculate to retire earlier. Anyway,Today let’s see where to spend our early retirement.That […]
Numbers to be financially independent
Today we need some numbers to understand how to be financially independent. Let’s start with a brief recap.You are financially independent if your assets make more than what you spend. FU Number Let’s start by imagining how much you spend annually to maintain your standard of living. Let’s put 24,000 (without currency which does not […]
Some basic concepts of finance
Today we will face the basic concepts of finance. They are not too much difficult, we need some basic maths and a little bit of statistics. #1: Return Here are two prices for stock A: A July August Price 100 101 We can calculate the **Stock A’s return = (**101−100)/100 = 1% in one month. […]
Passive incomes
In the previous post we talked about passive incomes, but what are they and how are they obtained? Online is full of fake gurus who try to sell you courses to teach you how to make a living by opening an e-commerce, buying the right crypto or something else … I love them and I […]