Decades ago, private banking simply meant that you have lots of money and you can pay for a “private” personal support for all your banking needs. It’s a very impressive brand of service that the rich desired–while the commoners just did not find it worth spending for additional cost. But what really are the benefits of private banking and what does it really mean as a sort of customer care?
For beginners, private banking, based on Investopaedia, is “personalized financial and banking support that are commonly offered to a bank’s rich, high net worth individuals (HNWIs). For wealth management practices, HNWIs have acquired far more wealth than the common individual, and therefore have the ways to access a larger selection of common and alternative investments. Private banks attempt to match such people with the most appropriate options.” So does this indicate that if you’ve only thousands in your bank account, you can’t sign up for private banking? Financial gurus say not necessarily. It really all depends upon the desire and whether a bank is specific about who gets to subscribe for this elite brand of customer service. If you want a personalized service that will provide the liberty to go over a wide variety of financial subjects that a competent banking team can offer advice on or substantial information about anytime, then private banking is definitely for you.
While the terms “investors” and “speculators” are often used interchangeably when explaining people that purchase stocks, these two groups of people are stimulated by drastically distinct investment strategies and objectives, with the previous focused on purchasing a stock at a deep discount to its implicit worth, while the latter gamble on price fluctuations within the market. Benjamin Graham, the author of the Intelligent Investor, identifies “An Investment operation is one which, upon comprehensive evaluation claims security return of initial (amount invested), and a sufficient return. Operations not reaching these requirements are speculative.” “Investors protect returns through developments in long-term efficiency of a company, while traders take advantage of daily changes in the bid/ask cost of an equity.” Says Hamed Mokhtar of Fortress Financial
Speculators will typically invest in a “hot” stock or “hot” industries, trying to ride the wave of price heightens caused by increased volume and desire for the equity. Investors, on the flip side, will identify and assess the financial records of a business, pinpoint what the real market price of the stock is worth, and only obtain it if the current price is trading well below this correct value cost. As outlined by Benjamin Graham, “there are a couple of feasible approaches to make the most of the continuing wide movement in stock costs, by way of timing or by way of pricing.” “The investor will reap the benefits of both, taking advantage of a bear market or negative conditions contributing to the frustrated value of a certain stock, and then sell that stock when its value climbs.” Says Hamed Mokhtar
“When buying stocks, speculators generally follow the group mentality, gathering positions after stocks have already begun to rise substantially, while investors take the other approach, only buying when an equity is undervalued and selling when it is overvalued.” Says Hamed Mokhtar. “While speculators help generate unpredictability, they also create huge options for investors. Speculation is fundamentally more dangerous than investing, as investors are mainly concerned with preserving their initial, making them inherently more risk averse. ” Says Mokhtar. As John Emerson states, when one buys an “undervalued” stock, risk is directly correlated to the investor’s ability to correctly determine the main worth of the stock. In other words, the risk is consummate to an error in computation. On the flip side, risk for the speculator is specifically correlated to the short-term unpredictability (price movement) of the stock. In other words, risk is consummate to improper timing.