Investment Styles Tongue-in Cheek. Excerpt from Traders, Guns & Money by Satyajit Das. This is an excellent book talking in depth on weapons of mass destruction aka derivatives, accounting magic & the glitzy world of finance and mega bonuses.
Index Funds
What is it? The fund manager invests to match some index like the S&P 500
What does it mean? The fund manager has given up trying to beat the market :P
Active Management
What is it? The fund manager tries to pick stocks that will do better than the market
What does it mean? The triumph of hope over experience. You, the investor, are paying for the experiment. :P
Momentum Investing
What is it? The fund manager chases whatever is going up.
What does it mean? The lemming or crowd theory of investing; the investment equivalent of a Finnish proverb: ‘Shit must be good, millions of flies can’t be wrong.’ :P
Value Investing
What is it? The fund manager invests in undervalued gems that he has uncovered through research.
What does it mean? Pure luck or you hope that the fund manager has inside information. :P
Yield Enhancement
What is it? The fund manager invests to generate above-market income.
What does it mean? You are taking on a whole lot of risk. You will be lucky to get your money back intact. :P
Portfolio Insurance
What is it? The fund manager guarantees you that your investment, at least 90% of it, is safe
What does it mean? Hand on, wasn’t a return of principal the least that you are entitled to? :P
Structured Investment
What is it? The fund manager will specifically design investment strategies to fit your exact risk and returns parameters using sophisticated investment tools & financial products.
What does it mean? A pure con job to charge you more fees. :P
Alternative Investment Strategies
What is it? The fund manager will invest in hitherto unknown assets – weather derivatives, catastrophe bonds, art, stamps, etc
What does it mean? You are an investment pioneer, good luck! :P
Leave A Comment