Posts Tagged ‘Financial markets’
A financial institution is one of the entities that make up the financial system. Financial institutions are commercial banks, central banks, mortgage corporations and / or savings and housing, stock markets, etc. A financial asset is the right of the possessor to receive the issuer’s future cash flows.
Is a document that creates obligations and rights, On behalf of the sender (a person who issues or “sell” the document) creates an obligation to fulfill a promise to pay the amount agreed · For part of the holder (person who bought the document) generates a right to receive such payments. The concept of financial asset, very briefly, is associated with two fundamental concepts in finance. A profit or yield concept and a concept of risk.
The holder of an active course looking for benefits, getting more money for himself, and runs certain risks such as loss of interest or even loss of capital invested, if things are not as good as they should be. Financial assets are generally of two types 1. Shares or any part of a business. 2. Debt (government bonds and private sector = ON) One of the most important financial asset is somehow allowing the risk not to concentrate on one type of fixed asset investments. A person who has money available, can be easily diversified their own activity to the purchase of other financial assets, and ultimately also the risk by diversifying their businesses in general. Maintains its core business, adding the possibility of having other income from other commercial or financial activities.
A financial market is a place where no physical or financial assets are traded. Main attributes of a Financial Market:
• Allows the pricing: A market includes various forms of pricing. For example, pricing in a loud voice, as used in the Stock Exchange or the Securities Market, or electronic and telephone trading (MAE).
· Provides greater liquidity: If there is a refuge or a place where we have the possibility of certain transactions with several operators and not having to search through our own means at our party.
• Low transaction costs, to be sufficiently developed financial markets, transaction costs are reduced significantly.
Change the way we do business in the future. The effects of global crisis, the disruptive influence of new technologies, the emergence of new business models and the search for new energetic, all discussed here.
1) Systemic Crisis
Many of the systems we have today are global to the brink because they were not designed to cope with the speed and volume of today’s society. We need an absolute change of national systems will lead to global systems. In the coming years, massive failures in most systems, including the tax system, judicial, security, money and more, and as they fall, new opportunities arise.
2) The “one-person Empires”
With financial markets in danger, the most popular form of entrepreneurship will be “one-person Empires,” a business run by one person with a broad spectrum of influence. This business model outsourcers all its operations to various organizations around the world. The high costs of employment and the power deposited in the individual technologies creating the perfect conditions to grow this model.
3) Business Colonies
Corporate colonies, as colonies of nanotechnology, video games, alternative medicine, there will be an incubator of specific industries as drivers of economic development. Be formed in cities as industrial centers and hotbeds of entrepreneurship. Will be both virtual and physical, of different size and structure. Will unite around a shared resource and thus share equipment or materials that are too costly for any one person can take over.
4) Cloud Computing
The ability to connect to your workspace in portable devices, wherever you are, avoiding complex and expensive systems is very interesting and, although some way to go is fairly advanced. In the last few years has made great strides with the advent of programs such as Amazon’s Web Services and Google’s App Engine. But for this movement to reach its full potential, still a few years.
5) Battle of alternative energy sectors
Although oil remains the main source of energy, the push for alternative energy is booming. In the coming years, will expand exponentially, reaching new ground in the production, transmission and storage.
If we talk about markets, such as financial market which consists of three main markets, debt markets (which in turn includes inter-bank market, foreign exchange, monetary and other fixed income), capital markets and derivatives markets. Securities traded in the derivatives market is a “derivative”, or commodities or fixed income securities, stocks or an index composed of several securities or commodities.
Therefore, the derivatives market can be separated into two segments, “Financial derivatives market” and “Financial Derivatives Markets.” Both are defined two types of traded securities, futures contracts and options contracts.
In this course we want to analyze and study the benefits derived products, with the aim to highlight how the proper use of them can not only help us meet our goal of profitability, but also clearly reduces the risk positions. In addition, we want students to know and use the applications in the financial markets and in real life are used to provide real greatest possible rigor.
Financial markets can function without physical contact, via phone, fax, and computer. There are also financial markets if they have physical contact, like the rings of the bag.
The purpose of the financial market is to bring supply and demand of funds, and determining fair prices of different financial assets.
The advantages of investors thanks to the existence of financial markets are quick search of financial asset that fits our willingness to invest, and in addition, that investment is a fair price which prevents us to cheat.
The price determines the price of supply and demand.
Another purpose of the financial markets is that transaction costs as low as possible. But we must insist that the main purpose is to determine the fair price of financial assets, this will depend on the characteristics of the financial market.
The closer a financial market to the ideal of perfect financial market, the asset price will be closer to his fair price.
Characteristics of Financial Market
- Size: number of financial instruments traded on financial markets. The more securities are dealt in the wider financial market.
- Depth: existence of supply and demand curves above and below the equilibrium price that exists at any given time.
- Depth: If there are people who would be able to buy at a price above the equilibrium price P0. And if there is someone who is willing to sell at a lower price.
- Freedom: If there are barriers to entry or exit from the financial market.
- Flexibility: ability of financial asset prices, which are traded on a market to change before a change occurs in the economy.
- Transparency: can obtain information easily. A financial market is more transparent when it is easier to obtain information.
In the Anglo world is much more common figure of the personal adviser, is an independent person (not part of any company or independent) that deals with advise on financial matters, not just investment. Where virtually all the “personal advisers” or personal bankers.Are used mainly by banks and independent savings will always be in question.
Only in the very high private banking advisers are independent. That will first seek the personal adviser will the greatest benefit to the client or the entity that is who pays them?. Ideally, to achieve both objectives, but we all know that this is not always possible.
Ideally, we had a person in our absolute confidence and with sufficient knowledge of financial markets / tax / legal that would make this work for us, as this is not possible in most cases, this topic we will try to convey a simple way what are the basic.
Principles we follow to make mistakes when deciding whether to invest in the stock market or fixed income or if we buy a home or rental. Do not know if we’ll win a lot or a little over, but if you know whether it is appropriate to our circumstances.