Posted on 02 January 2011
Tags: 6 million, balance, Business, costly venture, David Shorr, diverse in your investments, diversification, Diversified, diversified portfolio, diversified portfolios, Diversify, Exchange-traded fund, extraordinary stock, financial markets, Focused Investing, individual stocks, instance, investment, investment money, investor, investors, last straw, Lehman Brothers, losses, majority, Money, portfolio descends, risk, SEC, securities, small market investors, stock, unpredictability
The reason stated for David Shorr (a former Lehman Brothers employee) to have lost $6 million overnight was that he did not diversify.
Why Should We Diversify?
The main intent of diversification is dispersing the investment money so as to minimize the risk of losing the entire investment.
Why People Avoid Diversification
The basic reason why majority of investors do not invest in a variegated portfolio is because it would take the focus of their investment off the individual extraordinary stock that may score the most at the market. Thus by dividing their investment they would limit their soaring potential. However there are high risks involved in focused investment. Picking out the extraordinary stock in itself is a challenging task even for the most competent pro investors.
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Posted on 20 December 2009
Tags: Icap brokers, London inter-dealer broker, Mortgage Backed Securities, SEC, SEC's allegations, U.S. Securities and Exchange Commission, U.S. subsidiary, U.S. Treasury bonds
Icap PLC is known as the U.S. subsidiary of the London inter-dealer broker. By paying $25 million in penalties, the company has settled the fraud charges brought by the U.S. Securities and Exchange Commission.
Icap matches Buyers and Sellers for securities
The SEC said that in the over-the-counter markets Icap Securities USA matches buyers and sellers for securities like U.S. Treasury bonds and mortgage-backed securities via customer trading screens.
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Posted on 22 September 2009
Tags: High Net Worth Individual, HNWI, SEC, Stock Markets, U.S. Securities and Exchange Commission, UHNWI, Ultra High Net Worth Individual, Very High Net Worth Individual, VHNWI
In personal finance, the term “net worth” means the financial position of an individual, and it is calculated by using the value of all of the individual’s assets, subtracting the total debt that the individual owes. For instance, if a person has got $10,000 U.S. Dollars (USD) in cash, and $2,000 USD in stock, and he owes $5,000 USD in debt on a vehicle, then that individual this means that the individual has a net worth of $7,000 USD. A person is known as a High Net Worth Individual (HNWI) when his net worth exceeds from a certain amount, usually defined at $1 million USD.
Calculation of net worth
Usually in the calculation of net worth the value or liability of a person’s primary residence is not included. However, a HNWI is defined by the U.S. Securities and Exchange Commission (SEC) by slightly different criteria for their own purposes. It is requirement of SEC that all investment advisers who are registered with the SEC have to file reports, periodically, stating how many of their clients are HNWIs by the SEC’s definition.
HNWI defined by SEC
For the purposes of filing this form, a HNWI is someone who is having at least $750,000 USD being managed by the investment adviser filing the report. If it is reasonably believed by the advisor that the individual’s net worth exceeds $1.5 million, then this individual is also defined as a HNWI by the SEC. Unlike the criteria that is accepted in the banking and financial trade, the SEC also includes the value of a person’s primary residence in determining net worth.
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