winter 2012

f i n a n c i a l
The power of language

 

Understanding investment jargon


Stock Photo

 

 

In the fields of both medicine and finance, the use of specialized words and phrases challenges professionals to ensure they are using the power of language to increase comprehension, while communicating complex concepts.

By MD Physician Services

Have you ever noticed how words can bring people closer together, but used the wrong way they can sometimes drive us apart?

In the fields of both medicine and finance, the use of specialized words and phrases challenges professionals to ensure they are using the power of language to increase comprehension, while communicating complex concepts.

In this article, we explore the meaning of two terms investors may have been hearing frequently over the last few months: “risk-on/risk-off trading”, and “safe haven” assets.

Understanding risk-on/risk-off trading What is a “risk-on/risk-off” investing environment? Investors who have been following the financial news over the past few years will probably have heard this phrase, which is used to describe current market sentiment as either “risk-on” or “risk-off”.

Here is what this phrase means: During a risk-on market sentiment, investors are optimistic and more willing to take risk in exchange for the potential of higher returns. This means that riskier assets, such as equities, tend to rally (or gain in value) together while safe-haven assets like bonds fall. Conversely, when the market sentiment is risk-off, investor pessimism prevails, and investors move to lower-risk investments.

The phenomenon of trading environments described as either risk-on or risk-off can be understood as a legacy of the increased market correlations that developed during the financial crisis.

Understanding safe-haven assets

Because of the rise of risk-on/risk-off trading environments across global markets, investment assets are now often primarily identified along a spectrum of risk at one end, as “risky” or, at the other, as “safe haven” in nature.

As noted above, risk-on trades take place during periods of optimistic market sentiment, when investors are more willing to take risk in exchange for higher expected investment returns.

In contrast, in a risk-off environment, investors move towards “safe havens,” or perceived lower-risk investments which offer more liquidity, coupled with the likelihood of lower returns. The term “safe haven” is used to describe the investments that gain in popularity during risk-off trading environments.

Where to go for more

Whether you have encountered the specific investing phrases discussed in this article or not, as an investor it can be useful to understand the specialized terms you might encounter over time.

Feedbackck

Rating

 Poor Average Good Excellent 

 

Comments

 

Site Map | DisclaimerCredits | Webmaster
© Newfoundland and Labrador Medical Association (NLMA)

  

Articles

Summary

NLMA releases Strategic Plan to guide future direction of the Association

Preventing stroke in patients with atrial fibrillation

B4UR Pregnant provides resources for physicians promoting pre-conception health

The power of language

Time Management Guide designed for physicians by physicians

Montréal meeting on MD health sets records

CMA creates one-on-one leadership coaching program for MDs

Founder of Memorial’s medical school earns place of honor

NLMA dedicates boardroom in honor of Dr. Nigel Rusted

Hyperbaric oxygen therapy for diabetic foot ulcers

Rate-your-MD sites

Doctors in the News

From Peer to Peer

Health Council of Canada launches new Health Innovation Portal

In Memoriam

NLMA calls on province to include tobacco cessation therapies under the NLPDP

Symposium examines modern professionalism in medicine

iEHR Labs project under way

Healthy morning meals make a difference in the classroom

Standardized disability claim forms now available

Topics
A&E
AGM
Arbitration
Archives
Clinical Practice
CMA News
Common Revolt Against Paperwork (C.R.A.P.)
Corporate
Doctors in the News
Education
Events
Executive Director's Message
Financial
General Council
Government Relations
Health Administration
Health Policy
Health Promotion
Health Technology
In Memoriam
Information Technology
Job Action
Membership
Perspectives
Physician Wellness
Practice Management
Primary Care Renewal
Privacy
Resident's Corner
Staff
WHSCC
Inserts
NLMA Strategic Plan 2013-2018 (PDF)
The CMA on your mobile device (PDF)
NLPDP Behind the Scenes - Winter 2013 (PDF)
NLPCSG In Touch - Fall 2012 (PDF)
Issues
Winter 2013
Summer 2013
Spring 2013
Winter 2012
Fall 2012
Summer 2012
Spring 2012
Winter 2011
Fall 2011
Summer 2011
Spring 2011
Winter 2010-11
Fall 2010
Summer 2010
Spring 2010
Winter 2009
Fall 2009
Summer 2009
Spring 2009
Winter 2008
Fall 2008
Summer 2008
Spring 2008
Winter 2007
Fall 2007
Summer 2007
Spring 2007
Winter 2006
Fall 2006
Summer 2006
Spring 2006
Winter 2005
Fall 2005
Summer 2005
Spring 2005
Winter 2004
Fall 2004
Summer 2004
Spring 2004
Winter 2003
Fall 2003
Summer 2003
Spring 2003
Fall/Winter 2002
Nexus
Nexus DEFINED
A connected group or series; a bond, a connection.

Nexus is published quarterly for Newfoundland and Labrador's physicians. It is a forum for the exchange of views, ideas and information for members.