Six Numbers Every Investor Must Know

Making sense of Return, Risk, Diversification, Valuation, Leverage and Expenses

What you'll learn
Evaluate the risk and return of an investment objectively
Distinguish among the different method of measuring risk
Identify the various approaches used for valuation
Recognise the role that uncorrelated asset classes played in providing enhanced return and diversification
Relate how investment expenses affect return of an investment
Compute the numbers used for measuring risk and return
Requirements
This workshop is conducted in English and designed for people who do not have professional training in investment management. Therefore, participants are not required to have prior investment knowledge
If you know how to add and subtract, you will appreciate the course just fine.
Description
For many, investment is a subject that is mysterious and quite intimidating. This unfortunate outcome is no coincidence. Many in finance like to speak a different language. The language is intimidating to outsiders. But suppose you want to progress in your career. In that case, you’ll need to engage deeply in investment terminology —it is the language of business, the lifeblood of the economy, and increasingly a dominant force in capitalism. This course aims to provide you with the most central investing foundation so that you will never find finance intimidating again. Mastering these six numbers won’t make you a financial engineer—there are likely more than enough of those. Instead, internalizing these six numbers will provide the foundation for addressing financial issues with confidence.This workshop provides the conceptual foundation for understanding the financial markets through these six numbers.Numbers inform nearly every aspect of our investing lives; the challenge is knowing what to look for and how to interpret them.These six numbers, if well understood by the practitioners, would make navigating the complex investing world a lot easier.However, some numbers are more important than others. Sometimes, they prove what we doubt. Sometimes, they discredit what we believe. And on occasion, they permit us to say, “I told you so.” We need only look for them, and they are everywhere. They allow you to understand the context that you are investing in, verify claims made by gurus and take decisive action to benefit your portfolio.Start breaking away from the novice stage by familiarising these six numbers. Six numbers every investor must know show you what to look for in Return, Risk, Diversification, Valuation, Leverage and Expenses.This short course will help participants ask the right questions to guide them in their investment decisions. It is not a blueprint for beating the market but a commonsense approach for understanding the conceptual basics of investing.

Overview

Section 1: #1 - Getting to know the number on Return

Lecture 1 Introduction

Lecture 2 How do you compute investment return for your investment

Lecture 3 Measuring Return

Lecture 4 Return - Core Understanding #1 - The Risk Free Rate

Lecture 5 Return - Core Understanding #2 - The Risk Premium

Lecture 6 Return - Core Understanding #3 - How to calculate return

Lecture 7 The Math of Loss

Lecture 8 The Tyranny of Return

Lecture 9 Summary for #1 - The Number for Return

Section 2: Getting to know the number on Risk

Lecture 10 Using volatility as a measure of risk

Lecture 11 The mismeasurement of risk

Lecture 12 Hidden Risk

Lecture 13 Value at Risk

Lecture 14 It is about risk and return

Lecture 15 Summary for #2 - The number for Risk

Section 3: Diversification - The free lunch on Wall Street

Lecture 16 Diversification - It may not be intuitive

Lecture 17 The concept of low correlation

Lecture 18 Does two negatives produce one positive

Lecture 19 17 Diversification - The free lunch

Lecture 20 Diversification - Correlation coefficient

Lecture 21 Summary for #3 - The number for Diversification

Section 4: The number on Valuation

Lecture 22 Valuation - The Concept of Hurdle Rate

Lecture 23 Intrinsic Approach to Valuation

Lecture 24 Relative Approach to Valuation

Lecture 25 Asset Based Approach to Valuation

Lecture 26 Asset Based Approach to Valuation - Liquidation Value

Lecture 27 Summary for #4 - The number for Valuation

Section 5: The number on Leverage

Lecture 28 Introduction to leverage

Lecture 29 Understanding the carry trade

Lecture 30 Summary for #5 - The number for Leverage

Section 6: The number on Expense

Lecture 31 An Introduction to expense

Lecture 32 Types of investment expenses

Lecture 33 The Impact of expenses on investment

Lecture 34 Conclusion

Lecture 35 Summary #6 - The number for Expense

For many, investment is a subject that is mysterious and quite intimidating. This unfortunate outcome is no coincidence. Many in finance like to speak in a different language. The language is intimidating to outsiders. But if you want to progress in your career, you’ll need to engage deeply in investment lingo —it is the language of business, the lifeblood of the economy, and increasingly a dominant force in capitalism. So neglecting the language used in investing and hoping to survive in the industry is increasingly difficult as the client becomes more sophisticated. This course aims to provide you with the most central foundation of investing so that you will never find finance intimidating again. Mastering these six numbers won’t make you a financial engineer—there are likely more than enough of those. Instead, internalizing these six numbers will provide the foundation for addressing financial issues with confidence and gain trust with your client. Through these six numbers, this workshop provides the conceptual foundation towards understanding the financial markets. These six numbers if well understood by the practitioners, would make navigating the complex world of investing a lot easier. This short course will help participants ask the right questions to guide them in their investment decisions. It is not a blueprint for beating the market but a commonsense approach for understanding the conceptual basics of investing.