General questions

The "duration" of a bond is a metric that indicates the sensitivity of the bond price compared to changes in interest rates. It provides the average weighted maturity (in years) of the bond's cash flows and offers insight into how the bond's value reacts to interest rate movements.

Duration is often used by investors to assess interest rate risk. A high duration means that the bond price will react strongly to interest rate changes, while a low duration means that the bond price is less sensitive to interest rate fluctuations. The rule of thumb is that if the duration is 5 (the average weighted maturity (in years)) and the interest rate rises by 1%, the value of the bond decreases by 5%.

For the connoisseurs, there are two commonly used forms of duration:

1. Macaulay duration: This is the weighted average time (in years) needed to recoup the present value of all future cash flows of the bond. It is often used for theoretical calculations and is useful when comparing bonds with different maturities and coupons.
2. Modified duration: This is an adjusted version of the Macaulay duration that indicates how the bond price changes percentage-wise with a 1% change in interest rates. It is more practical for estimating interest rate sensitivity in investment portfolios.

In essence, duration helps investors to better understand and manage the interest rate risk of a bond.

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The disappointment or regret that people experience when they have not built up a sufficient pension, often because they previously saved too little or not at all. This is particularly common among self-employed people (zzp’ers), who later realise they do not have enough financial security for their old age.

"Flitslening" (also known as flitskrediet, minilening, minikrediet, or popularly a snack loan/strangle loan) is a loan with a short term, varying from less than 1 month to sometimes 1 year. This involves relatively small amounts, usually less than €500, but the interest is often very high, sometimes up to 25%, and the closing commission can also be significant. Due to these unfavourable conditions, these loans are sometimes called 'strangle loans'.

Flitsleningen are generally used to bridge liquidity shortages until the next salary payment. Although these loans may seem attractive due to their fast availability, they often carry hidden costs which massively drive up the actual costs, sometimes up to 500% on an annual basis. In the Netherlands, flitsleningen are now subject to supervision by the Autoriteit Financiële Markten (AFM), and a maximum credit fee of 14% on an annual basis has been set to better protect consumers against exorbitant interest rates.

"Flashcrash" is a term that refers to a sudden, very rapid drop in prices on the financial markets. This phenomenon can lead to a sharp fall in stock market indices within a very short timeframe, often within minutes. A well-known example is the event of 6 May 2010, where the Dow Jones Index on Wall Street fell by 9% in a few hours, resulting in the loss of 999 points, the largest absolute decline ever at that time.

Causes of a flash crash can vary, but they are often attributed to automated trading algorithms, 'high frequency trading', erroneous transactions (such as a 'fat finger' - input error), or large market-order sell orders. These computer-controlled transactions can quickly set off a chain reaction of price drops, causing the market to fluctuate sharply within moments.

"Follow This" is a movement/association of activist shareholders that focuses on the oil industry ('Big Oil'). By acquiring equity stakes in large oil companies, Follow This attempts to encourage and force these companies from within to seriously work towards achieving the climate goals agreed upon in the Paris Agreement. These shareholders use their voting rights as 'responsible' shareholders to encourage oil companies towards more sustainable practices and an acceleration of the energy transition.

"Financial stability" is a solid, well-functioning financial system that facilitates the proper operation of the economy and is robust enough to absorb and counteract financial shocks resulting from disappointing and unexpected events.

In practice, this means ensuring:

• Stable prices (the absence or near absence of inflation or deflation),
• A well-functioning, efficient payment system,
• Solid financial institutions, monitored by good supervision.

Financial stability is essential to maintain confidence in the financial system and to prevent disruptions in the financial sector from spreading to the wider economy.

"Funding round" (also known as a capital round, investment round or money round) is a step or series of steps that a company takes to attract external capital. The time between funding rounds varies and depends on the time a company needs to achieve certain objectives or milestones, which often leads to an increase in the company's valuation. As a company develops further and the risk for investors decreases, larger amounts can typically be 'raised' in later funding rounds.

During each funding round, the terms and conditions are renegotiated, giving investors specific rights linked to the shares. Shares from different funding rounds are usually named Series A, Series B, and so forth. In practice, investors will generally strive for more favourable or at least equivalent terms and conditions compared to previous rounds.

“Fintech” is a combination of the words “financial” and “technology” and refers to the innovative application of technology in financial services, with the aim of improving and automating the delivery and use of financial services. Fintech includes both the optimisation of existing financial services and the development of entirely new business models that differ from traditional forms of financial services.

In recent years, this sector has experienced tremendous growth, supported by significant investments from venture capitalists and major financial institutions. Fintech includes developments such as digital payment systems, robo-advice, investment apps and blockchain technology, and plays an important role in the transformation of the financial sector.

A “finfluencer” (also known as a financial influencer) is an influencer who focuses on money matters such as budgeting, saving and investing (“personal finance”). These financial influencers use platforms such as podcasts, blogs, Instagram, YouTube or Facebook to share their insights and advice.

Finfluencers are a rapidly growing phenomenon, particularly among younger people interested in investing and financial independence. Although finfluencers often have a large reach, there are concerns about the quality and reliability of their advice, as they frequently lack a formal financial background. This can lead to risky recommendations and a lack of transparency about their own interests and the compensation they receive, potentially misleading their followers.

"Fear of Missing Out (FOMO)" is the fear of missing things, or the uncomfortable feeling that you are missing out and that others are experiencing more enjoyable, more interesting things or seizing more opportunities than yourself at that moment. This phenomenon is often amplified by social media, where you are constantly kept informed of what others are doing.

In the financial world, FOMO manifests itself as the fear among investors of missing out on interesting investment opportunities. This fear can lead to investors massively investing in promising companies or markets, even if they become overvalued. This can happen, for example, in the technology sector, where the fear of not stepping into a "new Facebook or Alibaba" can drive up the valuations of young companies and lead to overvaluation or bubbles.

"Fat finger" (also known as a 'dikkevingerfout' in Dutch) is a term that refers to input errors made during the manual entry of data into computers, via keyboards or touchscreens. These errors mainly occur in dynamic and stressful environments, such as trading floors and dealing rooms, and can sometimes have major financial consequences.

A fat finger error occurs when, for example, a trader accidentally inputs an incorrect amount or quantity, leading to huge orders being placed. This can result in large price fluctuations, so-called "flash crashes," and chain reactions in financial markets, especially due to computer-controlled trading systems that react immediately to price and volume deviations. It is a nightmare for every stockbroker and has already led to significant losses in the past.

"Forward guidance" is the communication by the governing body of a central bank about its intentions concerning long-term interest rate policy, including the associated policy rate and any asset purchase programmes. With this, the central bank provides insight into the criteria and circumstances under which it will make adjustments to monetary policy, with the aim of managing market expectations.

Forward guidance offers financial markets clarity about the future direction of interest rate policy, but there is also criticism of this practice. Some argue that announcing long-term interest rate policy can lull markets into a false sense of security and make them overconfident, leading to excessive risks being taken. Opponents mockingly call this phenomenon "forward misguidance."

"Financially vulnerable" is a term used to indicate that a person, household, or company has few financial reserves or buffers to absorb unexpected setbacks. There is no exact limit for what this means, and various studies use different criteria.

According to a study by the Central Bureau of Statistics (CBS) from 2017, people who are not economically independent are considered financially vulnerable. This means that their net income from work and own business is below 70% of the statutory net minimum wage, which corresponds to the net social assistance for a single person. In 2015, this amounted to €11,080 per year, or €920 per month.

Financial vulnerability can mean that someone has no buffer for unexpected expenses, making it difficult for them to make ends meet or be unable to build up savings. It can occur in various groups, including households, flexible workers, or families without a stable second income.

"Financial films" are films that have the workings of the economy, financial markets, and financial crises as their subject. They often highlight themes such as human greed, misconduct in the financial world, speculation, manipulation, and fraud. These films offer a narrative insight into the world of finance and often show how the pursuit of wealth and power can lead to unethical behaviour.

Examples of well-known financial films are "Wall Street" (1987) with the iconic character Gordon Gekko, "The Wolf of Wall Street" (2013), and "The Big Short" (2015), which tell the story of financial misconduct and its consequences. In addition to fictional stories, there are also numerous documentaries that highlight the complexity of the financial markets and their impact on the world.

These films and documentaries contribute to a better understanding of financial themes and show the risks and consequences of financial speculation and greed.

"Bankruptcy fraud" (also called fraudulent bankruptcy) is the prejudice of creditors by withdrawing goods and/or money from the (almost) bankrupt estate, preventing creditors from seizing the assets. This type of fraud is punishable and occurs in various forms, such as:

• Keeping incorrect records or destroying/embezzling them.
• Failure to account for revenues or the use of funds for private purposes.
• Withdrawing assets from the estate before the bankruptcy.
• Preferential treatment of certain creditors.
• Provoking a bankruptcy to avoid debts.
• Mismanagement whereby a company deliberately goes bankrupt.
• Transfer of shares to a 'front man' to mislead the curator.
• Establishing a company with the aim of not making payments and subsequently letting it go bankrupt.

Bankruptcy fraud harms creditors and is a serious form of financial abuse that is tackled by justice.

“Financial markets” are markets (physical or virtual) where the supply and demand for money, securities, or financial instruments come together. Although many people associate financial markets with trading floors and stock exchanges, the definition also includes less formally organised markets, such as transactions via the OTC market, arranging mortgages through banks, peer-to-peer lending via the internet, or even informal trading on street corners.

Financial markets perform a range of important functions, including price discovery, providing arbitrage opportunities, asset valuation, attracting long-term capital, allocating financial resources, managing risk, and facilitating commercial transactions. These markets play a crucial role in the economy and form the heart of the financial system by ensuring the efficient allocation of capital, the management of risk, and the support of trade transactions.

"El Niño" is a climate phenomenon that refers to a greater than normal warming of the sea water off the west coast of South America, which occurs once every three to seven years. This phenomenon often has a great influence on the weather, with consequences such as drought in North and South America and floods in Southeast Asia.

The opposite effect, an unusual cooling of the sea water in the same area, is called La Niña and also has significant consequences for the climate.

Investors often anticipate the occurrence of these phenomena and their influence on commodity prices, as drought and floods can lead to failed harvests, which can drive up the prices of certain products and other raw materials.

"In the shop window" means that an enterprise or business unit is actively offered for sale by the management and/or the owners and that potential buyers or an acquiring party are being sought. This is often done when a company wants to focus on its core activities, or when a specific unit no longer fits within the strategic focus, performs poorly, or when the parent company wants to benefit from the sale of valuable assets.

This divestment process can be part of a wider restructuring or strategic reorientation within a group.

"Eurocrisis" (also called the European debt crisis) is a financial crisis that gripped the Eurozone since the beginning of 2010, after it became apparent that Greece had provided incorrect information about its debts. This led to great unrest on the financial markets and put the future of the common currency, the euro, at stake. Besides Greece, Ireland, Portugal, Cyprus, and Spain also needed financial support to stay afloat.

The crisis forced European government leaders and ministers, under great pressure from the financial markets, to quickly establish missing components of the economic and monetary union, including the creation of the European Stability Mechanism (a permanent emergency fund), a joint economic and budgetary policy, and the development of a banking union.

The greatest panic during the euro crisis only disappeared in the summer of 2012, after Mario Draghi, President of the European Central Bank (ECB), promised during a historic press conference: “Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

"Year-end rally" (also called Christmas rally; known in the US as Santa Claus rally or simply Santa rally) is a significant rise in stock prices in the final weeks of the year. The duration of this rally varies: sometimes it lasts a week, sometimes several months, and stock market analysts often start using the term as early as the beginning of November.

Historically, this phenomenon is quite frequent, with, for example, the S&P 500 showing a rise in 74% of cases in December between 1950 and 2019. Various theories explain the year-end rally, such as professional managers attempting to make their annual results look more prosperous, an upturn in the economy during the holidays due to increasing consumer spending, or investors anticipating the January effect by buying shares as early as the end of December.

The year-end rally is often viewed as a seasonal effect that gives a positive boost to the stock market towards the end of the year.

"Energy poverty" is a situation in which a household struggles to pay the monthly energy bills, because a relatively large part of the available income (after deduction of housing costs) is spent on oil/gas and electricity costs. This may mean that the household is unable to meet heating needs, due to a lack of financial resources or the poor condition of the home.

Energy poverty generally affects single people harder than families, and the situation is often worsened by rising energy prices or insufficient insulation of homes. It is generally defined as a situation in which more than 10% of a household's income is spent on energy costs.

"Everything rally" is a term coined by Bloomberg for a strong simultaneous increase in value (rally) across multiple investment categories, even when they normally move in opposite directions to each other. This makes it a very exceptional and rare situation. In Dutch, it is also translated as 'alles rally'.

During an everything rally, for example, shares, bonds, gold, cryptocurrencies and real estate shares rise simultaneously, which normally does not occur due to their usual opposing movements. This phenomenon can be a sign of a temporary, positive market situation, but can also indicate a period of excessive euphoria among investors.

"Equity (EV)" is the part of a company's assets that is not financed with third-party funds (by debts). It represents the capital contributed by the owners to the company and on which there is no repayment obligation, in contrast to external capital.

The equity can increase through the issuing of new shares or making a profit, and decrease through the purchase of own shares, losses, or distributions to shareholders (dividend). In sole proprietorships, the equity is affected by private withdrawals and contributions.

The equity is considered the owners' claim on the company's assets and is therefore also referred to as 'permanent capital', as there is no obligation to repay.

The "Eurozone Budget" is a common European budget for countries in the eurozone, intended to absorb economic shocks in the economies of the euro countries. Since countries in the euro can no longer pursue an independent monetary policy that suits their specific situation, a eurozone budget offers the possibility to support countries that fall into a sudden deep recession, which can prevent unemployment.

Although the eurozone budget does not yet exist, it is being proposed by the European Parliament and French President Emmanuel Macron, among others, as a means to strengthen the eurozone and prevent a new euro crisis. In 2019, a first step in this direction was taken with the European Budgetary Instrument for Convergence and Competitiveness (BICC).

"Digital transformation" (also known as digital transition) is the integration of digital technology into all areas of a business, which leads to fundamental changes in the way work is done and value is delivered to customers or clients. It goes beyond just the use of technology; the core lies in creating value through technology.

Digital transformation often brings about a change in corporate culture. Organisations that embrace digital transformation must be prepared to continuously question existing working methods, experiment with new techniques, and deal with the challenges that accompany this. This often means saying goodbye to traditional business processes in favour of new practices.

The meaning of digital transformation differs per organisation and context, and it is also a fashionable term or 'buzzword'. It is important to emphasise that digital transformation is not the same as digitalisation; digitalisation is often the first step towards digital transformation.

"ESG" (Environmental, Social, and Governance) is a term used in the capital markets and by investors for non-financial indicators that measure the performance of companies in the field of environment (Environmental), social performance (Social), and good governance (Governance).

These indicators include such things as energy efficiency, greenhouse gas emissions, staff turnover, employee training and qualifications, legal risk, corruption, and revenue from new products. Sector-specific benchmarks have been established to measure the ESG performance of companies.

ESG is important for investors who want to integrate sustainability and social responsibility into their investment decisions, as it provides insight into how companies manage their impact on the world and their long-term business operations.

"Economic growth" is the increase in the production and consumption of goods and services within an economy, usually measured by the percentage volume growth of prosperity. The most common measure for this is the gross domestic product (GDP), often expressed at market prices over a certain period.

A distinction is made between nominal growth, which includes inflation, and real growth, which is corrected for inflation. Negative economic growth is referred to as an economic contraction or a recession.

Economic growth arises from factors such as population growth, higher average consumption, improved labour productivity, and a positive trade balance due to more exports than imports. It is a crucial concept for prosperity and standard of living, but must be interpreted with the necessary caution and in the right context.

"Dollarisation" (also known as dollarising or dollarification) is the large-scale use of the American dollar as a means of payment or currency for setting prices and issuing quotes, particularly in countries with a weak currency where the domestic currency is distrusted by the population because of high inflation.

Sometimes countries even officially replace their own currency with the dollar as legal tender or use the dollar and the domestic currency alongside each other. Upon the abolition of the domestic currency, monetary supervision lapses, as does the ability to pursue one's own monetary policy, which limits control over the economy. Although the dollar has historically been a dominant world currency, its role has come under increasing pressure in recent years.

"Economic sanction" is an economic measure imposed by a country, a group of countries, or international organisation(s) against a country, its officials, or private citizens. These sanctions are usually instituted to put an end to undesirable acts or policies, such as violations of international law or human rights, or to bring about a change in policy when legal or democratic principles are not being observed. They can also serve as a preventive measure to discourage certain actions.

Economic sanctions can take many forms, including travel bans, restrictions on import and export, trade embargoes, freezing of assets, and seizure of assets. They are aimed at parties who otherwise cannot easily be brought under the jurisdiction of the sanctioning authority. Companies, organisations, and countries that violate the sanctions can also be subject to penalties themselves.

"Perpetual bond" (also known as perpetual obligation, perpetual loan, or in jargon "perpen") is a bond that has no maturity date and is therefore not redeemed. The issuer only pays interest, without the obligation to ever repay the principal.

Because these bonds have no maturity, it is difficult to calculate an exact effective yield. A well-known example in the Netherlands are the ledger loans of the Dutch state, which still pay interest.

In practice, many loans that are labelled as "perpetual" are ultimately redeemed by the issuing institution. This happens at a time that the institution itself chooses, which is called "calling" in jargon. Perpetual bonds are mainly issued by financial institutions because, due to their long duration, they are considered risk-bearing capital.

"Dividend" is the portion of the profit paid out to the shareholders of a company as a reward for their investment. In exchange for providing risk-bearing capital (equity), shareholders receive both voting rights and the right to a dividend.

The dividend is paid out from the remaining profit of the company after the deduction of all liabilities. A portion of this profit is usually not distributed, but added to the general reserve or used for new investments.

A dividend can be paid out in various forms, such as a cash dividend (money) or as shares (stock dividend). Fast-growing companies will often distribute little or no dividend, as they need their resources for further growth. The dividend payout ratio indicates which portion of the total profit is distributed to shareholders.

Furthermore, there are special forms of dividend, such as the super-dividend (a one-off high distribution) and loyalty dividend (extra distribution for loyal shareholders). The dividend yield is the dividend as a percentage of the stock price and is an important measure for investors looking for stable income.

The actual distribution of the dividend usually takes place in instalments, often with an interim dividend and a final dividend in Europe. The dividend is paid out on the ex-dividend date, and the share price usually falls by the amount of the dividend on that day.

In short, a dividend is an important form of reward for shareholders and can have a significant effect on the attractiveness of a share for investors.

"Economic dominance" (also referred to as dominant market position or significant market power) is the situation in which an undertaking holds such a strong position that it can act independently of its competitors and customers or hardly gives others the chance to sell their products or services.

Economic dominance often arises from a combination of factors, such as a high concentration ratio, homogeneous products, high barriers to entry, a saturated market, or symmetry between the major parties in terms of market share and cost structure.

Although having economic dominance is not necessarily contrary to the law (such as the Dutch Competition Act), the abuse of it is prohibited. Abuse can manifest in practices such as tying and bundling, offering products below cost price to deter new entrants, or demanding excessive prices.

Regulators, such as the European Commission and the Netherlands Authority for Consumers and Markets, supervise concentrations of undertakings to prevent economic dominance from distorting or reducing competition.

"EOE-Optiebeurs" was the first modern options exchange in Europe, established on 4 April 1978 under the official name Vereniging European Options Exchange (EOE). In the Netherlands, the exchange was mainly known as the EOE or Optiebeurs. In the 80s, the name EOE-Optiebeurs was introduced as a trade name.

In 1996, the EOE-Optiebeurs merged with the Amsterdam Stock Exchange to form Amsterdam Exchanges (AEX) and continued as a division under the name AEX-Optiebeurs.

History: In 1975, a working group was established in the Netherlands to investigate the possibility of tradable options on securities. The goal was to set up an international options exchange that would be supported by all important European securities centres. Although other European stock exchanges withdrew due to problems with legislation and regulation, the Vereniging European Options Exchange (EOE) was founded on 30 November 1977. The EOE-Optiebeurs started trading on 4 April 1978 with 9 option classes (call options only) and 69 option series.

The EOE used the trading system of the Chicago Board Options Exchange (CBOE), and clearing was provided by the European Options Clearing Corporation (EOCC).

The EOE-Optiebeurs distinguished itself by the high proportion of private investors and became an international trendsetter in the area of cooperation with other exchanges.

The EOE-Optiebeurs played an important role in the development of the European options market and remains an important chapter in the history of financial trading in the Netherlands and Europe.

"Eurobond" (also called E-bond, stability bond, or eurozone bond) is debt paper that would be jointly issued and guaranteed by the Eurozone countries (countries of the Eurozone). They are seen by many as a possible solution to the European debt crisis and the consequences of the coronavirus crisis (2020).

Eurobonds would lower the cost of borrowing for weaker Eurozone countries (also called "euro sinners"), while it would become more expensive for stronger countries such as Germany and the Netherlands to borrow. This is because the interest on these bonds would be higher than what stronger countries currently pay, and lower than the rates for the weaker countries. That is why there is sometimes mockingly spoken of 'interest socialism' and the risk of 'moral hazard'.

Strict requirements regarding budgetary discipline and economic reforms would be imposed when introducing Eurobonds to prevent countries from handling their finances irresponsibly. Several prominent economists are of the opinion that the introduction of Eurobonds is necessary to make the Eurozone more stable and less vulnerable.

"Ease of Doing Business Index" (also known as Doing Business Index or Doing Business Ranking) is a project of the World Bank and the International Finance Corporation (IFC) that measures how easy or difficult it is for an enterprise to conduct business in a particular country based on legislation, regulation, and the enforcement thereof. The index focuses primarily on small and medium-sized enterprises (SMEs).

The aim of the index is to provide objective metrics that can help improve legislation and regulation so that economic activities can better flourish. 11 sets of indicators are used to measure how simple it is, for example, to start a company, obtain building permits, arrange an electricity connection, register land, obtain credit, and enforce contracts.

The index provides annual insight into the degree of transparency, efficiency, and certainty with which business can be conducted in a country. The report is published every year around the end of October and offers countries the opportunity to compare and improve their investment climate.

"Dark pool" is a method or platform within a trading system with which large institutional investors, such as investment funds and hedge funds, can trade substantial orders with a certain degree of anonymity. These trading platforms are called 'dark' because the transactions that take place there are not shown in public order books, as is the case with traditional stock exchanges.

Dark pools have little transparency and are only accessible to large parties, meaning there is no level playing field for all market participants. These platforms are often managed by large banks and other financial institutions, and are designed to process transactions efficiently and discreetly.

Although dark pools offer certain advantages, such as limiting market impact on large transactions, they are also controversial because of the lack of transparency and the possible risks for smaller investors. Trading via dark pools has been under increased scrutiny since the Wall Street crash in May 2010.

"Part-time work trap" is a term that refers to the situation in which part-time work, particularly by women, is so ingrained in Dutch society that it prevents them from working more hours or working full-time. The Netherlands is a leader in part-time work within the EU, with women working an average of 28 hours per week compared to 39 hours by men.

The part-time work trap arises from a combination of factors, such as social norms that assign women the primary responsibility for care and household, a labour market that almost automatically offers part-time jobs in certain sectors, and a lack of public facilities and arrangements that support full-time work by both partners. Moreover, a high marginal tax burden ensures that working extra is financially unattractive, causing women to remain stuck in the part-time work trap.

This situation makes it difficult for women to advance in their careers and contributes to the unequal distribution of work and care in the Netherlands.

"Deflation" is an economic situation in which the prices of goods and services fall across a wide front for a longer period, resulting in a general and sustained price decrease.

According to many economists, deflation can slow down the economy, because consumers tend to postpone their spending in the expectation that prices will fall further, and companies in turn postpone their investments. This can lead to a negative spiral of decreasing demand and falling production. Additionally, deflation increases the debt burden, because the value of debts relatively rises when prices fall, making it more difficult for companies and individuals to pay off their debts.

Deflation can arise when the production of goods and services increases while demand lags behind, or as a result of a financial crisis where prices fall due to a collapsing market. Although some forms of deflation, such as those caused by a falling oil price, are considered "good deflation," sustained, widespread deflation can be damaging to the economy.

"Dear Board-brief" is a letter from an activist investor to the management board of a company, in which the investor tries to convince the board to take certain drastic decisions. The letter is usually a formal starting point for exerting pressure on the board and takes its name from the salutation, which often begins with "Dear Mr. CEO..." or "Dear members of the Board of Directors...".

Before the letter is sent, the investor has often already built up a shareholding and carried out a thorough analysis of the company. One-on-one conversations may also have already taken place with the board. If these conversations do not lead to the desired action, the Dear Board-brief is sent to put the demands on the table and to place certain subjects on the agenda of the general meeting of shareholders (GMS).

The activist investor often seeks allies early on to reinforce their plans. If the board does not respond, the pressure is further increased via critical statements in the press, social media, or even by initiating legal proceedings.

"Deglobalisation" (also called de-globalisation) is the opposite of globalisation and refers to a development in which there is increasing protectionism, a decreasing willingness for international cooperation, less integration, and a decline in mutual economic dependencies between countries. As a result, cross-border investments decrease and world trade declines.

This trend can lead to less growth in exports and reduced economic growth, especially for countries heavily dependent on international trade. Deglobalisation is closely related to the term "geo-economic fragmentation" and reflects a world in which countries are increasingly focused on their own economies rather than on global cooperation.

"Sustainable investing" (also known as ethical investing or socially responsible investing) is a form of investing in which ethical, socio-economic, and environmental criteria are taken into account. Investors select their investments based on their contribution to themes such as care for the environment, the welfare of people and animals, poverty reduction, and social justice.

In sustainable investing, it is often assessed whether companies meet certain standards, such as avoiding investments in sectors like alcohol, tobacco, and defence equipment, or conversely, stimulating sustainable energy production. Additionally, attention is paid to responsible policy, respect for human rights, and corporate governance.

Although there is sometimes an assumption that sustainable investing can lead to lower returns, opinions on this are divided. More and more investors see the value of socially responsible investing, despite potential return sacrifices.

"Devaluation" is the official reduction in value of a currency relative to one or more other currencies, where this reduction in value is not based on free market forces but results from a policy measure by the central bank. Previously, this also meant a reduction in value relative to gold, under the gold standard.

Devaluation makes the domestic currency cheaper relative to other currencies, which has two important consequences: the country's exports become relatively cheaper for foreign buyers, while foreign products become more expensive for domestic consumers, which discourages imports. As a result, devaluation can contribute to increasing exports, reducing imports, and lowering a current account deficit.

At the same time, devaluation can increase the prices of imported goods, which can fuel inflation. This can ultimately lead to a wage-price spiral, nullifying the positive effects of the devaluation. Devaluation is sometimes used as part of broader economic shock therapy to stabilise or stimulate an economy.

"Deposit Guarantee Scheme (DGS)" is a set of regulations that offers protection for the balances of account holders at financial institutions in the event that these institutions - such as banks - encounter payment problems or go bankrupt.

Since the introduction of the Banking Union on 4 November 2014, the Deposit Guarantee Scheme has been centrally regulated by the European Central Bank (ECB). In the Netherlands, the DGS offers a guarantee of up to € 100,000 per person per institution. If a bank goes bankrupt, De Nederlandsche Bank (DNB) ensures that savers receive their money back within three months up to this maximum. The costs of this compensation are subsequently recovered from other banks in proportion to their business volume.

This scheme is intended to safeguard confidence in the financial system and to ensure that savers do not lose their money if their bank encounters problems.

"De Nederlandsche Bank (DNB)" is the central bank of the Netherlands and also functions as a supervisor of the financial sector. Established in 1848, DNB is currently wholly owned by the Dutch State and responsible for monitoring financial stability in the Netherlands. Its main tasks include guaranteeing low inflation, payment traffic, and the supervision of the soundness and integrity of financial institutions.

Since the credit crisis, supervision by DNB has been significantly tightened. In addition to DNB, the Authority for the Financial Markets (AFM) is the other financial supervisor in the Netherlands, with the AFM responsible for conduct supervision and DNB for prudential supervision.

With the advent of the Economic and Monetary Union (EMU) in 1999, the European Central Bank (ECB) took over the policy tasks of national central banks, including DNB. DNB now implements the ECB's policy, but the president of DNB still has a say in the ECB's decision-making.

"Dag der verantwoording" (also called "Verantwoordingsdag" or "Gehaktdag") is the day on which the Dutch government accounts for the financial policy of the previous year on the third Wednesday in May.

On this day, the Minister of Finance presents the annual reports for the past budget year to the Tweede Kamer. The Algemene Rekenkamer publishes its reports with these annual reports, and the Tweede Kamer checks whether the budgets have been executed in line with the agreements made on Prinsjesdag. Because Members of Parliament often strongly criticise the policy pursued and try to dissect the policy, the day is mockingly called "gehaktdag" or "woensdag gehaktdag".

Gehaktdag is an important moment in the budget cycle because it provides insight into how well the government has performed and where improvements are needed.

"Funding ratio" is the ratio between the assets (the available resources) of a pension fund (such as investments) and the pension obligations the fund has towards all participants (the present value of the amount to be paid out to them).

The funding ratio gives an indication of the solvency position of a pension fund and is therefore also called the "pension thermometer". A funding ratio of 105% means, for example, that 105 euros are available for every 100 euros of pension obligations.

The funding ratio is a crucial measure for determining whether a pension fund is able to pay both current and future pension benefits. The interest rate plays an important role in this; the higher the interest rate, the lower the present value of the obligations and the higher the funding ratio.

There are different types of funding ratios, such as the actual funding ratio, policy funding ratio, economic funding ratio, nominal funding ratio, and real funding ratio, each contributing in its own way to insight into the financial health of a pension fund.

"Circuit breaker" is an emergency brake for stock trading in the financial world, a rule set by an exchange or supervisor that temporarily halts trading to temper panic reactions.

For example, if the share price drops by a certain percentage (e.g. 15%) within one trading day, trading can be interrupted for a specific period, such as half an hour (also called a 'freeze'). This mechanism is intended to calm the markets and prevent panic sales from further destabilising the market.

Circuit breakers are similar to the 'emergency stop' or 'emergency brake' and are applied to manage unexpected price drops and restore stability.

"Cashen" is a Dutchification of the English 'to cash' and means realising the value of an asset, bringing in money, taking profit, or cashing in. This can be, for example, through the sale of a shareholding or an exit by taking a company public.

The term is often used when investors or shareholders convert their investments into cash, often after a successful period of value growth or during a strategic exit.

A “central bank (CB)” is a public institution that manages the currency of a country or group of countries and controls the money supply. The central bank acts as a bank for commercial banks and influences the flow of money and credit in the economy in order to promote price stability.

Central banks are not commercial banks; individuals cannot open accounts or apply for loans with them. They are also referred to as the “bank of banks” or the “lender of last resort” and their primary task is to promote monetary and financial stability.

One of the main instruments of a central bank is setting interest rates to steer monetary policy. In addition, the central bank supervises the banking sector, ensures the smooth functioning of the payment system, and is responsible for issuing banknotes.

"Cashcow" is a product, product group, or part of a company that continuously generates a large proportion of sales or profit and has a large market share in a stable, mature market.

The term comes from the BCG matrix, a model for portfolio analysis developed by the Boston Consulting Group (BCG) in the early seventies. The model is widely used by entrepreneurs, managers, marketing people and consultants to determine which parts of a company generate the most value.

A cashcow is seen as a stable and reliable source of income for a company, with which the company can finance other investments and growth opportunities.

"Cafeteria system" is a system whereby an employee of an organisation can choose from various forms of pension or employment conditions, such as leave days, childcare, professional literature, or training courses.

An exchange of existing conditions for a new package often takes place. Usually, a part of the taxed salary is converted into a benefit that is free of payroll taxes, making it more attractive for both the employee and the employer.

"Capital Asset Pricing Model (CAPM)" is a theory that establishes a relationship between the expected return and the risk of an investment relative to the total stock market.

Within the CAPM, the risk of an individual stock is divided into two components:

The 'specific' or 'non-systematic' risk, which is related to the company itself and can be eliminated through diversification.

The 'market risk' or 'systematic' risk, which arises from market-wide factors and cannot be diversified away.

This market risk is measured by the factor 'beta', which indicates how sensitive a stock is to market movements.

"Crowdfunding" is a method of financing whereby money is attracted via the internet by large numbers of small financiers, each of whom invests relatively small amounts. Thanks to the internet, it is possible to reach many people, win their trust, and thus raise money at low costs. Many small contributions therefore collectively form a large amount by appealing to the masses, or the 'crowd'.

Crowdfunding is used by, amongst others, charities, start-ups, scale-ups, and commercial and political organisations to raise money. The 'goodwill factor' often plays an important role here, because investors must be willing to donate or invest out of sympathy or trust.

This form of financing is a component of crowdsourcing, where not only money but also knowledge, services, or other forms of support are collected by the masses.

"Credit rating" is an independent assessment of the creditworthiness of a company, institution, government body, country, or investment fund. This is expressed in symbols, ranging from AAA (triple-A, the highest creditworthiness) up to and including D. It indicates how likely it is that the debtor will meet their financial obligations.

Credit ratings are provided by independent credit rating agencies, such as Moody's and Standard & Poor's, which analyse both the current creditworthiness and the future credit prospects. This assessment helps investors to better understand the risks of an investment and make decisions based on the creditworthiness of the involved party.

"Consensus forecast" is the average expectation of a series of analysts or research agencies. In this process, the individual analyses, for example, expectations regarding earnings per share, are added together and averaged.

There are specialised information providers and research agencies, such as Consensus Economics and Zacks Investment Research, which offer such bundled analyses. Websites such as Belegger.nl also offer these consensus forecasts. Sometimes, listed companies themselves ask analysts to perform a consensus estimate.

The consensus forecast gives investors an idea of what the market thinks about the future performance of a company and can serve as a reference point for investment decisions.

"Carried interest" is a form of remuneration in which fund managers receive a percentage of the profit without investing in the capital themselves. This serves as an incentive for fund managers to realise capital gains. The remuneration is linked to the financial performance of the fund: the higher the return, the higher the carried interest. This fee comes on top of the management fee charged by the fund manager.

Although this system encourages fund managers to make a profit, it can also lead to speculative behaviour, as the fund managers are rewarded for price increases without running a risk for price decreases. These are often substantial percentages, such as 20% of the profit, which is especially common in venture capital funds. Sometimes the first part of the profit is disregarded, for example at 5%, so that only the return above a certain threshold is considered true performance.

"Competition" is the mutual rivalry or struggle between enterprises, for example in the struggle for market share, turnover, profit, market power, reputation, or purchasing power.

The more competition there is, the more enterprises are forced to operate efficiently. Competition is therefore good for cost efficiency and stimulates innovation. Economists have identified different types of competition, of which the most ultimate form is 'perfect competition'. This is a theoretical model of perfect competition that rarely occurs in practice.

Competition plays a crucial role in stimulating healthy market operation and ensures that companies continuously improve and innovate.

"Corporate broker" is a stockbroker or merchant bank that advises companies in the field of corporate finance. This broker has extensive knowledge of specific shares, guides share issues (and is willing to buy and sell shares in the process), and is actively involved in advice and support in the field of investor relations.

Corporate brokers are important partners for companies looking for financing, stock exchange listings, or strategic advice and offer support in building relationships with investors.

"Corporate venturing" is the provision of venture capital by in-house investment funds of large enterprises. These corporate venturing funds are usually set up to support the strategic objectives of the parent company and help with the realisation of innovation and growth.

Companies use corporate venturing to invest in new technologies, business models, and start-ups that can add value to their own activities, and thus ensure their future resilience.

"C-suite" is a designation for the most important directors of a company, the group of officials within an organisation who have the word 'chief' in their job title.

In Anglo-Saxon terminology, which is also widely used internationally, job titles almost always begin with a C, such as the chief executive officer (CEO) and the chief financial officer (CFO). Modern companies often have multiple 'chiefs' who are each responsible for a specific business area.

These leaders form the core of strategic management and are decisive for the direction and growth of the organisation.

"Century bond" is a bond loan with a maturity of one hundred years. Although 'century loan' would be an appropriate Dutch translation, this term is hardly ever used anymore. Despite their name, some 100-year bonds are redeemable early, which means that they can already be repaid before the full maturity of a century has expired.

A well-known example is the bond that Disney issued in 1993, which should mature in 2093 but can already be repaid from 2023.

Century bonds offer investors the opportunity to invest in the extremely long term, but it is important to know that the issuer often has the flexibility to repay the loan earlier.

"Investment mix" is the distribution of investments across different investment categories, such as liquid assets (deposits), shares, bonds, real estate, and commodities. It also includes the subdivision into domestic and foreign investments and the various subcategories within these investment categories.

By varying the investment mix, an investment portfolio can acquire a more aggressive (higher risk) or more defensive (lower risk) character, depending on the objectives and risk profile of the investor.

The right investment mix helps in finding the balance between risk and return, and ensures that your capital is built up in a way that suits your financial goals and horizon.

"Stock market year" is a calendar year in which trading takes place on stock exchanges or, in a broader sense, on financial markets.

This term is often used in combination with adjectives such as 'good', 'positive', 'bad', 'turbulent', and so on, to describe the stock market climate and the return achieved in that year.

A stock market year provides insight into the performance and developments of the financial markets over a certain period, and the result can tell investors a lot about the trends, opportunities, and challenges that have occurred during that year.

"Stock market guru" is an influential investment expert or successful investor who regularly shares their opinion in the media about stock market and price developments, and is followed by a large group of investors.

What characterises stock market gurus is their combination of knowledge, discipline, and a long-term vision. They base their investment strategy on thorough research and analysis, and remain patient instead of reacting impulsively to short-term market movements or emotions such as fear and greed. Additionally, they apply diversification and risk management as core principles. Warren Buffett, for example, is a well-known example of a successful stock market guru.

Sometimes the term 'stock market guru' is used ironically, which may indicate some scepticism towards their predictions or statements.

It is very important that you do your own research. Never blindly accept financial advice.

"Beach stocks" is a term for shares of companies in the travel and leisure industry. This term encompasses the English investment themes: Booking companies, Entertainment providers, Airlines, Casinos/Cruises, and Hospitality/Hotels.

The term was introduced by BNY Mellon Investment Management in May 2021, in the expectation that a large pent-up demand would arise in this sector after the relaxation of corona restrictions. Beach stocks are therefore also called 'reopening stocks' because they benefit from the recovery of the economy after the pandemic.

Beach stocks can offer interesting opportunities for investors who want to capitalise on the revival of the travel and leisure industry, while consumers resume their postponed travel plans and leisure activities.

"Tax avoidance" is the attempt to pay less tax through legal methods. Although it is legally permitted, this does not automatically mean that tax avoidance is ethically justifiable. Loopholes in legislation and tax treaties are often used to minimise the tax burden.

A well-known quote about this is: "The difference between tax avoidance and tax evasion is the thickness of a prison wall." This underlines that tax avoidance may be legal, but is often morally debatable.

Tax avoidance directly relates to issues of fairness and responsibility, especially in a time where growing wealth inequality and the importance of contributing to society are central.

With Vive, tax avoidance is not possible. We have a direct connection with the tax authorities for every person who has invested in a Vive pension or wealth management. In this way, we remain completely transparent as an organisation.

"Belanghebbende" is a party (person, organisation, or part of an organisation) who is involved in a particular matter and who is directly or indirectly affected by decisions taken about it. A stakeholder can both influence the matter and be influenced by its outcome.

Examples include customers, suppliers, shareholders, employees, the management board, trade unions, the government, or local residents of a company. In contemporary business and government jargon, the English term "stakeholder" is often used.

Stakeholders play a crucial role in determining the direction and impact of an organisation, and their interests must be carefully considered in important decisions to create sustainable value.

"Bankers' paradise" is, derisively, the ideal world for a banker where it is easy to earn money, often at the expense of customers or even society as a whole.

An example of this is the criticism of the European Commission's "Capital Markets Union", which is seen by some as a step towards a 'bankers' paradise' in which financial advantages are created for a small group at the expense of the rest of society.

This term emphasises the risks and inequalities that can arise in a financial market that is too focused on the benefit of banks, instead of on the interests of society as a whole.

"Investment portfolio" is the total amount of investments held by a professional or private investor.

This portfolio consists of various investments, such as shares, bonds, real estate, or other financial products, and forms the basis of how an investor builds up and manages their assets. The goal is to find the balance between risk and return, aligned with the investment goals and financial planning.

A well-composed investment portfolio ensures that your assets grow in a way that suits your financial goals and risk tolerance.

"Investment policy" is the way in which a private or professional investor arranges their securities portfolio, taking into account matters such as the investment status, the investment motives, the investment horizon, and the demands and wishes in the area of costs, risk, and return.

An example of this is how Vive has adjusted its investment policy by checking whether investments have ESG ratings. This way, Vive can work towards a better world, and not just financial return. Social impact and risk management are also included in this.

In short, an investment policy provides direction on how investors approach their investments and ensures that the strategy is in line with their goals, values, and risk tolerance.

"Business Valuation" is the determination of the value of a company or its parts using various valuation methods and techniques. Here, we look at the economic value, based on the net cash flows and the risks of the enterprise. The 'discounted cash flow method' is often used for this, which looks at future income and costs.

The most common reason for a business valuation is during the transfer of shares in an enterprise. This can be during a takeover, a management buy-out, the purchase of a minority shareholder's interest, business succession, divorce, or inheritance.

In addition, a valuation is useful for establishing economic damage, tax matters, legal proceedings, and for introducing share and option schemes for employees. Business valuation is also becoming increasingly important within financial reporting and annual accounts.

Ultimately, it is all about gaining insight into the true value of a company, so that you can make well-considered choices for the future.

"Investment style" is the way an investment fund shapes its investment policy and establishes certain preconditions for the fund manager. For example, one fund might focus on investing in shares of medium-sized companies (Midcap funds), while another fund focuses on large companies (large caps).

Some funds choose to invest in growth shares ('growth'), while other funds focus on shares that primarily create value ('value'), also known as value shares. There are also funds that use a combination of both approaches; we call this a 'mixed investment style' or 'blended investment style'.

In short, the investment style determines how a fund pursues its objectives and plays a crucial role in how returns and risks are managed, enabling investors to achieve their financial goals.

A “bad bank” is a specially established bank holding company (often set up by the government) into which the “bad loans” of one or more existing banks are transferred. These problematic loans, also referred to as “toxic financial products”, are taken over from the banks at low prices (with substantial discounts). By removing these bad loans from their balance sheets, the credit quality of the affected banks improves, creating room for them to issue new loans.

An example is the National Asset Management Agency (NAMA) in Ireland, which was created to relieve Irish banks of their non-performing loans. Although a “bad bank” helps stabilise financial institutions, there is a risk that the losses are ultimately borne by taxpayers, since it is effectively a state-backed institution.

In short, a “bad bank” can offer a solution for banks in distress, but it is a complex and sometimes controversial way of restoring banks’ balance sheets.

"Business case" is a quantitative and qualitative description of the contribution that a proposed or planned action can make to a company or organisation. It is a tool that assists with decision-making and serves as a planning instrument.

A good business case contains, just like a business plan, a financial justification (costs, revenues, cash flows, etc.) of the action, but unlike a business plan, a business case focuses specifically on the impact of a single action, not on the entire organisation. Topics can range from the introduction of a new product to developing or purchasing a new software system (‘make or buy’ decisions).

A business case is often used to compare different alternatives. A positive business case means that the action improves the organisation compared to the current situation, for example, through extra income, savings, a higher cash flow, or non-financial benefits such as strategic growth or increased customer satisfaction.

A good business case must be clear about the scope, financial criteria, assumptions, critical success factors, time horizon, and possible risks. This way, you get a complete picture of how this action can help your organisation move forward and enable you to make well-considered decisions.

"Tax haven" is a country (often an island) with a deliberately favourable tax climate where private individuals and companies establish themselves to utilise tax benefits. Companies are often only established in name, as a type of letterbox company. These countries have low tax rates, generous tax exemptions, or special arrangements according to international standards that enable tax avoidance. The legislation is usually not very transparent and these countries are often uncooperative in sharing tax information with other countries, which is why they are also called 'secrecy jurisdictions'.

Tax havens are often legally used in international 'tax planning' for passive income sources, such as financing activities, investments, or intellectual property. Unfortunately, they are also used for illegal activities, such as tax evasion and money laundering.

In short, a tax haven offers companies and individuals the opportunity to minimise taxes, but it also has a downside that can lead to misuse and financial opacity.

"Balance Sheet" is a snapshot of the value of the assets (possessions and business resources) and liabilities (the capital, consisting of equity and debts, or rather, external capital) of the enterprise.

The asset side (debit side) of the balance sheet lists the possessions and claims of the enterprise. The liability side (credit side) shows how these assets have been financed, with an overview of the equity and the external capital.

The balance sheet provides insight into a company's financial health at a specific moment and is essential for understanding the capital position, so that well-considered financial decisions can be made.

"Asian scalping" is a trading strategy aimed at exploiting small price differences in currency pairs, primarily through arbitrage.

This strategy is mainly applied during the transition period between the closure of the European markets and the opening of the Asian markets. Scalping, in this context, refers to quickly entering and exiting positions to profit from small price fluctuations.

This method requires quick decisions and is often used by traders to profit from the lower liquidity and volatility present during this period. Although the profit margins are small, the frequent transactions can lead to substantial returns.

Evening Exchange refers to the unofficial trading that takes place after the close of regular trading on Euronext. This trading focuses primarily on Dutch shares that are also listed on the New York Stock Exchange (NYSE).

During the Evening Exchange, investors can continue to trade in these shares after the official close of the Euronext stock market. This offers extra opportunities to trade in shares that are traded on both the European and American markets.

Autotrading refers to completely following the trading strategies or advice of a professional trader.

Investors can choose, via online platforms, to have their investments managed automatically according to the recommendations of these traders, often referred to as "gurus."

With autotrading, an investor can have their capital automatically invested based on the trading decisions or advice of the chosen professional(s), without actively trading themselves. This offers an easy way to benefit from the expertise of experienced traders.

Autoquote is a computer system that automatically or at the request of a trader calculates bid and ask prices for different option series. This system uses parameters determined by the traders themselves, such as volatilities and interest rates, or parameters that have been set in consultation with the exchange.

Autoquote systems are used to quickly update the prices of option series or to quickly publish prices during rotations, such as at the opening or closing of the exchange.

This helps with the efficient management of prices and the improvement of liquidity in the options market.

Automatic exercise is a procedure whereby purchased (deep-)in-the-money options – or long positions – are automatically exercised by the bank, broker, clearing member or clearing corporation on behalf of the option holder.

This is done to prevent the options from expiring worthless.

In the case of automatic exercise, the options are automatically exercised if they are deep in-the-money, so that the option holder can realise their value instead of allowing the option to expire without any value.

Autonomous capital refers to capital that requires active management and decision-making to meet the financing needs of an enterprise. This means that management must consciously decide to attract this capital and take action to obtain it.

This capital is often obtained through financing agreements such as credits or loans.

Self-financing capacity refers to a company's ability to finance its growth from its own operating cash flows.

This process is also called self-financing or own-financing. The extent to which a company can do this is referred to as the self-financing capacity.

If a company wants to grow faster than its self-financing capacity allows, it will have to attract external financing to support the extra growth.

Autocallable structured products are investments that are automatically converted or redeemed as soon as certain external conditions are met.

These conditions can include, for example, the achievement of a specific value of an index, security, currency, or commodity. These products were probably first introduced in 2003 and have since become increasingly popular.

The automatic redemption or conversion happens when the predetermined criteria are met, which can lead to early termination of the investment.

Attribution concerns the analysis of a portfolio's performance by comparing it to a benchmark. The goal is to understand how different components of the portfolio – such as sectors, regions, or individual stocks – contribute to the total performance.

Attribution analysis examines how much each part of the portfolio, through overweighting or underweighting of investment categories, sectors, regions, or individual securities, contributes to the total performance.

This helps to determine which choices and strategies had the greatest effect on the portfolio's return.

English: attribution.

Autocallable products are structured financial products that are based on an index. They have a specific characteristic: they can be automatically and prematurely redeemed if the price development of the underlying index meets predefined criteria.

With autocallable products, the redemption is automatically executed at specific times, depending on how the index performs in relation to the agreed conditions. If the index meets these conditions at a certain point in time, the product is prematurely redeemed, often with a return for the investor.

Attribution analysis is a method for evaluating the relative performance of a portfolio by comparing it to a benchmark. This analysis helps to understand how the portfolio performs in relation to the benchmark.

Attribution analysis examines how different components of the portfolio – such as stocks, sectors, or regions – contribute to the total relative performance. The contribution is determined by the under- or overweighting of specific sectors, regions, or individual securities. This means you can see how strategic choices in the portfolio's composition have influenced the return relative to the benchmark.

Asset swap is the exchange of assets between two parties, often without a financial transaction taking place. These types of agreements are usually concluded privately, meaning that the exchange takes place without direct financial exchange.

An asymmetric shock is an event that affects a specific economy (such as a country, region, or trade bloc), while other economies are affected less or differently. This can also be the case within a joint currency area, where one part of the zone is hit by a shock, while other parts are not, or are affected in a different way.

An economic shock is a sudden and often unexpected change in an economic variable that pushes an economy, region, or sector out of its normal cycle. In the case of a symmetric shock, all economies, regions, or sectors are affected equally. This is often the case with global recessions, where the impact is reasonably uniform across different areas.

In contrast, with asymmetric shocks, not all sectors or regions are affected equally. This can lead to divergence, where different parts of a region or currency bloc are hit in different ways. Asymmetric shocks often affect one country or region within a larger geographical area.

Examples of asymmetric shocks:

• A rapid rise in the oil price can have positive effects for oil-producing regions such as Texas and Alaska, while having negative consequences for areas dependent on oil consumption such as California.
• The collapse of the Argentinian peso in 2002 (the 'tango crisis') had a much greater impact on Spain than on other eurozone countries, due to the strong historical and business ties between Spain and Argentina.
• The rise of Apple and the success of the iPhone had a major impact on Finland due to the important role of telecom producer Nokia in the Finnish economy.
• In 2022, the war in Ukraine was expected to hit the European economy much harder than the American economy.

Asset stripping refers to the process where assets of an acquired company are sold, or the company itself is split up and the different parts are sold separately. This often happens after an acquisition, where the proceeds are used to repay the loans taken out for the acquisition (debt reduction).

During asset stripping, the company is valued to determine whether selling separate parts yields more than selling the company as a whole. The sale of the parts usually happens in phases: some parts are sold quickly after the acquisition, while other parts are sold at a later time.

"Asset allocation fund," also known as a mixed fund or balanced fund, is a type of investment fund that invests in various types of assets, such as stocks, bonds, and other securities. The purpose of this fund is to spread risk and offer a balanced mix of investments that suit the investment objectives and risk profile of the investor.

Mixed funds are designed to benefit from the advantages of diversification, whereby capital is distributed across different asset classes to reduce the impact of negative performance in one sector or market. This makes them attractive to investors who want a balanced portfolio without the need to carry out active management themselves.

Asset-based financing, also known as asset-based lending or asset based financing – refers to a form of financing in which a lender (the financier) obtains security by establishing rights over specific assets of the borrower. These can be assets such as debtors, buildings, machinery or inventory. If the loan is not repaid, the financier can seize the collateral.

This form of financing offers flexibility and often frees up maximum liquidity based on a company's current sales figures. This contrasts with traditional forms of credit which are based on historical data, such as turnover, cash flows and balance sheet ratios (for example, leasing and factoring).

The "As-you-like option," also known as the "chooser option," is a flexible option that offers the holder the opportunity to choose, during a pre-determined period, what type of option it will ultimately be (for example, a call or put option). This choice can be made at any point within the option's term, depending on how market conditions develop.

This option offers investors the freedom to adapt their strategy to changing market conditions, allowing them to respond to unforeseen developments. It is an advanced financial instrument that is often used in complex trading strategies.

Analytical option models are models that work with a closed mathematical formula to calculate option prices and risk ratios. A well-known example is the Black-Scholes model, which is often used in the financial world to determine the price of options. These models offer a direct, mathematical approach to simplify complex calculations and are essential in risk management and option strategies.

The expression "As dead as a doornail" is used in traders' jargon to describe a market that is totally quiet and immobile, without any significant trading activity. This image sketches a situation where there is barely any supply or demand, and prices hardly change. It gives the impression of a market that is "stone dead", without any dynamics or fluctuation.

The saying "As goes January, so goes the year" is an American stock market adage which suggests that the stock market's performance in January can be an indication of the market's performance throughout the rest of the year. This phenomenon is also called the "January Barometer". Although it is not a scientifically proven connection, some investors value it and use it as a guideline for their investment decisions.

The arbitrage principle states that in an efficient market no risk-free profit opportunities should exist. This means that it is impossible to earn money sustainably without risk and without own capital. If such an opportunity were to arise, market participants would quickly act to exploit this opportunity, causing the price differences that create this possibility to quickly disappear.

An annex fund is a fund set up by an investment company, such as a venture capital company, to support other investment funds within the same company. This fund is specifically used in situations where it is difficult to attract external capital. The annex fund provides extra financial resources to continue with investments, especially when market conditions are challenging.

An arbitrageur is a specialist in arbitrage trading, which means this person trades in financial markets to profit from price differences between various markets or products. Arbitrageurs use fast transactions to generate profits by, for example, buying the same asset in a market where it is undervalued and simultaneously selling it in a market where it is overvalued. This requires in-depth knowledge of market dynamics and a sharp eye for opportunities.

The AOW-leeftijd is the state pension age in the Netherlands as laid down in the General Old Age Pensions Act (AOW). This age is increasing step-by-step, with 66 years as the target in 2018 and 67 years in 2021. Since 2022, the AOW-leeftijd has been linked to life expectancy: as people get older, the AOW-leeftijd shifts further up. It has stood at 67 years and 3 months since 2024.

This means that the AOW-leeftijd varies based on someone's date of birth. However, there is also much discussion about this link, and proposals have been made to slow down or temporarily freeze the increase in the AOW-leeftijd.