Concepts in Focus
From 2% to 3%: One Percentage Point, a Different Percentage Change
Work through the difference between percentage points and percentage change with a small example before interpreting a financial headline.
Financial ideas, carefully read
Concepts in Focus
Plain-language explanations of financial ideas, with room for assumptions, limitations and further reading.
Concepts in Focus
A 25% Fall Needs More Than a 25% Rise to Recover
Follow a hypothetical value from 100 to 75 and back to understand why the percentage needed for recovery differs from the original decline.
Concepts in Focus
An Average Return of Zero Can Still Leave Less Money
Compare an arithmetic average with a two-period ending value using a hypothetical gain and loss, with assumptions stated beside the calculation.
Concepts in Focus
A Valuable Asset Is Not the Same as Readily Available Cash
Read liquidity claims by asking about time, price and transaction conditions rather than assuming a stated asset value is immediately available money.
Concepts in Focus
A small percentage fee deserves a plain-money question
Translate a percentage fee into a simple money example, then check the charging basis, frequency and additional costs before comparing products.
Concepts in Focus
Compound interest: follow two years before projecting twenty
Understand compounding through a small two-year example and see why a calculator result depends on assumptions rather than guaranteeing an outcome.
Concepts in Focus
More money, less buying power: a small inflation example
Separate a change in your money balance from a change in what it can buy, using a simple hypothetical basket of goods.
Concepts in Focus
Diversification is more than a long list of holdings
Different labels can hide similar exposures. Learn why the contents of a portfolio matter more than the number of names on a statement.