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Financial babble confuses investors


Unlike the common assumption that the Swiss are highly literate in financial matters, the opposite seems to be more accurate. The incomprehensible babble produced by the PR departments of the financial institutions may contribute to this illiteracy.
Messages distributed by the PR departments of financial institutions are usually meant seriously, but cannot always be taken seriously. For instance, one should not be put off by internal contradictions such as "shares are not expensive despite high valuations in some cases". Normal common sense says that everything that is highly valued is also expensive, but of course this does not apply to the financial sector. So you can confidently buy expensive shares, and perhaps they will become even more expensive.

There are hardly any limits to the imagination to offer a supposed added value with incomprehensible financial jargon: "The market breadth is high and there is a healthy sector rotation." The same Outlook continues in similarly illuminating fashion: "Investors should therefore keep an eye on this double-edged sword and reassess it regularly."

The markedly declining attention span of the readership is met with superlatives of irrelevance and creations of new words. A digital insurer recently launched "the fastest motor vehicle insurance in Switzerland." And anyone who doesn't know that a "quantitative management strategy" with "convex protection" for global and liquid shares probably only hides a Potemkin village won't ask any critical questions.

No wonder the perplexed investors prefer to quantitatively spend their mental energy on topics other than financial matters.
Published on 04. December 2020 by Christian R. Weber
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