Anh T. Nguyen
Doctoral Candidate in Finance at Hanken
Worked as a Finance manager at the world largest elevator firm, best performing equity fund in Europe and entrepreneur
Three MSc in Finance and CEMS MiM at Aalto
Location Finland
Activity
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Hello @IsraëlThierryMayidimaLemandi ,
Utility functions are being studied by researchers. How much joy you get from consuming vs. i.e. postponing are taken into account when optimizing utility under constraints.
Keep learning!
Anh Nguyen
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Hello @IsraëlThierryMayidimaLemandi ,
Indeed, there is no investment that is risk free. The most safe and therefore relatively low expected return investment is perhaps a loan to US government i.e. 10 year government bonds.
Best regards,
Anh Nguyen -
Hello @MBM.rin ,
Exchange traded funds or ETFs, track indices of various markets, investment strategies, depending on the investment preferences of investors. Most typical example is a market broad-based fund that tracks the whole stock market and gives investors the exposure to returns of the whole market, at a relatively small fee.
Best regards,
Anh... -
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Hello @JohnGrisi ,
Era of negative in US has ended the first ever experiment of negative interest rate. Raising interest has been a way to fight inflation, making asset cheaper. Discount rate across asset classes rise and therefore the discounted cash flows are smaller in value.
Raising interest can curb growth and risk inflation. Therefore, interest...
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Hello @MBM.rin ,
There are many asset classes the offer investment opportunities to investors. Traditionally, stocks and bonds have been used in 60/40 Bond/stock portfolio of very conservative investors i.e. pension funds.
Additional asset classes i.e. real estate as among the largest asset classes, gold, art, digital assets have been added and so...
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Anh T. Nguyen replied to MB M.rin
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Anh T. Nguyen replied to MB M.rin
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Hello @ChoudharyIslam ,
Investing requires a holistic approach usually, meaning taking into account many factors. From there, one can for example prioritize which factors are more important than others.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to John Grisi
Hello @JohnGrisi ,
Index funds track market index and allow investors to invest in the whole market even. The cost is also lower than active or strategy funds. Its return per year is lower than many active funds. It comes to the issue of investment preferences of investors. Some people seek for higher returns and higher risks.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to John Grisi
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Hello @MercyFashanu ,
Younger investors tend to have more risk tolerance. Investors have different time horizon, risk aversion level, etc. and therefore seek to optimize returns within their contraints.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to Ngbede Janet
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Hello @JacquelineLouw ,
Remember the concept of expectation and reality. One would sensibilty expect higher returns in compensation for higher risks. Whether this expectation realizes or not is another thing.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to B P
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Anh T. Nguyen replied to JAVIER AF
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Anh T. Nguyen replied to R M
Hello @RM ,
Risk tolerance of people are different. You are right. There are extremely risk taking people out there. Borrowing money is an obligation to pay back for "sure". Whether you have positive returns on your investment is not for sure. Then comes the concept of expected value, which takes into account probability multiplied by absolute value. This...
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Anh T. Nguyen replied to R M
Hello @RM ,
There are many categories of market, developed, developing, emerging, frontier market etc. Investment banks i.e. Morgan Stanley tacks these indices.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to Dan Prior
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Dear @JohnGrisi ,
The January has been well studied.
"Stock prices tend to rise in January, particularly the prices of small firms and firms whose stock price has declined substantially over the past few years. Also, risky stocks earn most of their risk premiums in January."
Remember that when the anomaly is well studied, it can disappear already...
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Anh T. Nguyen replied to John Grisi
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Anh T. Nguyen replied to Yuan-Ping Lai
Hello @Yuan-PingLai ,
Market becomes more efficient when market prices reflects information more accurately. More market participants and liquidity can be argued to increase market efficiency, but can also create more noise.
For reference, recent research on data and market efficiency, please refer to...
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Hello @JohnGrisi ,
Marketing timing is a critical issue in investment and has been well studied in academic research in as early as the 70s.
For reference, https://www.jstor.org/stable/2326944
Best regards,
Anh T. Nguyen -
Hello @n'nancocquotchrystellekouassi ,
The higher the risk, the higher returns is expected to compensate for that risk. Otherwise, why do you bother?
Expectation and realities are different concepts. Realities do not always converge to the expectation. So, there come the concept of probability.
Best regards
Anh T. Nguyen
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Anh T. Nguyen replied to John Grisi
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Anh T. Nguyen replied to Tara Gunn
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Hello @n'nancocquotchrystellekouassi ,
As mentioned in the above video, Dr. Björn Wahlroos also thinks there is a myth about gold as an investment asset class. But gold has been traditionally been considerred a safe haven.
In our modern days, the new modern tech has given rise to many other investment instruments. It remains to be seen their role to be...
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Anh T. Nguyen replied to Rob Whitlock
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Anh T. Nguyen replied to John Grisi
Hello @JohnGrisi ,
As mentioned,
There is the powerful effect of compounding. "Even though the timeframe has just 2.1-folded from 30 to 63 years, the end-of-period wealth has 12.7-folded. "
But in practice, it is difficult to achieve i.e. keeping the money in investment account for such a long time, maintained the mentioned 8% return per year...
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Hello @Yuan-PingLai ,
To be more accurate, higher risks are expected to be compensated by higher returns.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Rasmus Ek
Hello @RasmusEk ,
In financial market, money making ability depends a lot on the market timing skills of portfolio managers.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Thu Thảo
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Anh T. Nguyen replied to Yuan-Ping Lai
Hello @Yuan-PingLai ,
As mentioned in the course material, cost reduction and the time effect have signicant consequence on the end of period wealth.
Stay tuned!
Anh T. Nguyen -
Anh T. Nguyen replied to John Grisi
Hello @JohnGrisi ,
Later in the course, you will find info, Q&A on gold as an investments. Gold itself does not create anything. But, it is valued by large enough amount of people. So, traditionally gold has been a safe haven. Nowadays, there are much more asset classes to invest in.
Stay tuned! Keep going forward!
Anh T. Nguyen
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Hello @Yuan-PingLai ,
Just to be clear,
5% of equity premium, the outperformance of equities over bonds, is generally accepted as said by Dr. Björn Wahlroos.
Anh T. Nguyen
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Anh T. Nguyen replied to R M
Hello @RM ,
It is true. If inflation is too high, real returns are eaten up.
Nominal returns = Real return + inflation (rough approximation)
Refer to text book for math derivation i.e. Claus book
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to K M
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Anh T. Nguyen replied to Maryam Baomar
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Hello @ChoudharyIslam ,
Interesting questions. There can be various reasons. For example, not all are informed about these forms of "invisible" investments. Some want to see the tangible assets i.e. houses, lands, etc.
There are also the various psychological and preference aspects of investment decisions.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to John Grisi
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Hello @Yuan-PingLai ,
You have the good point that the US government is generally considered to among the least likely to default on their debts.
Best regards,
Anh Nguyen -
Anh T. Nguyen replied to Cindy Belt
Welcome @CindyBelt !
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Welcome @FranziskaHoffmann !
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Anh T. Nguyen replied to Suvi Hietalahti
Welcome @SuviHietalahti !
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Anh T. Nguyen replied to Yuan-Ping Lai
Welcome @Yuan-PingLai !
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Anh T. Nguyen replied to Ngbede Janet
Very glad to hear. Keep it up @NgbedeJanet!
Anh Nguyen
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Anh T. Nguyen made a comment
Welcome to the course run for Fall 2022!
We hope you enjoy and explore the world of wealth management!
In this forum, you can discuss your ideas! The floor is yours!
Anh T. Nguyen
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Anh T. Nguyen replied to Raymond Lebona
Hello @RaymondLebona ,
Just to make sure there is no confusion, generally market premium refers to the equity market. For bonds, the more risky the bond is, the higher the expected returns of the bonds. US government is in general more reliable than other governments. Therefore, US government bonds/bills are expected to yield lower returns.
Best...
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Anh T. Nguyen replied to prue byambasuren
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Anh T. Nguyen replied to Deepel Persaud
Hello @DeepelPersaud ,
As in the material, "Bessembinder finds that stocks have, historically, outperformed U.S. Treasury bills only because some stocks have performed extremely well. He finds that more than half of all stocks underperform Treasury bills over their lifetime, and only roughly 43% of stocks generate lifetime returns that are higher than... -
Anh T. Nguyen replied to Özgür Aslan
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Hello @DeepelPersaud ,
Risk tolerance or risk aversion is one of the key factors in pricing assets. Currently, researchers are working to integrate the appropriate risk aversion coefficient to asset pricing models, trying to find an appropriate risk aversion coefficient.
The level of aversion itself varies with individuals. Some people are more risk...
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Anh T. Nguyen replied to Amar Shami
It is also important that gold is traditionally appreciated by large enough people. It is a combination of many factors that make gold valuable.
Best regards,
Anh T. Nguyen -
As the key take away from our course, diversification is key. :)
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to David F
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Anh T. Nguyen replied to Amal Vadher
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It is really important to use financial instruments right for the benefit of society. Mishandling can even lead to mental breakdown, suicide, crime rates etc.
But our society have learnt so much from the past. My view is looking for the optimistic learning curve!
Anh T. Nguyen
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Anh T. Nguyen replied to Joseph Asare Aidoo
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In the course material, Dr. Björn Wahlroos, however does not rule out that one can find an excellent portfolio manager who has a differentiated strategy in a differentiated market. Knowing which manager succeeds due to luck and which manager succeeds due to skill is another thing.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Paul Jones
Hello @PaulJones ,
As comments above, referring from Bernanke's (2013) and Geithner (2014), "too big to fail" does not really work in the GFC 2008. The banks, such as Lehman Brothers, were not able to finance its obligations and did not have enough collateral. So, eventually, it went bankrupt.
"Too big to fail", a concept invented in 1984, have been of...
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Anh T. Nguyen replied to Sue Beasley
Once you understand the logic of the formula, all the math within our course is designed to be learner friendly. Keep practising!
Best regards,
Anh T. Nguyen
Doctoral Candidate at Hanken -
Anh T. Nguyen replied to David F
During market crash, liquidity and investor behaviours change significantly, among others.
A post by Nobel Laureate Shiller:
"Questionnaires were sent out at the time of the October 19, 1987 stock market crash to both individual and institutional investors inquiring about their behavior during the crash. Nearly 1000 responses were received....
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Hello @DavidF ,
Some bonds offer protection against inflation, e.g., U.S. Treasury Inflation-Indexed Securities. Other assets can also be used as hedges against inflation such as real estate, gold, commodities, etc. It is important to have a diversified portfolio in various states of the world. Modern researchers have been developing i.e. state price...
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Anh T. Nguyen replied to David F
Hello @DavidF ,
As mentioned in earlier comments addressed to you, beta in the mean variance framework measures how volatile stock returns is compared to the market returns. If beta is more than 1, one can interpret that the stock return is more volatile than the market return.
Best regards,
Anh T. Nguyen
Doctoral Candidate at Hanken
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Anh T. Nguyen replied to David F
Hello @DavidF ,
As the course progresses, Dr. Björn Wahlroos 's view is that diversification is key. In theory, you can diversify the individual risks away but not the systematic risk. This systematic risk is captured by the beta coefficient, in the framework of mean and variance. Mind that modern researchers have developed many frameworks to be...
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Anh T. Nguyen replied to David F
Hello @DavidF ,
It is very important to understand how returns are calculated as mentioned in the course. For example, compound annual (geometric) return tells you how much you earn per year with interest compounded. In the article above, you can see that arithmetic returns zero with returns +50% and -50% per period but geometric returns is 75%, which...
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Anh T. Nguyen replied to Paul Jones
Hello @PaulJones ,
It is important to understand the index you invest in e.g. taking into account both capital gain and dividend. These are usually total value indices. Index funds passively track the indices by replicating and reconstitute the component of the indices, allowing investors to invest in the whole broad based market. They are usually cheaper....
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Anh T. Nguyen replied to Paul Jones
Hello @PaulJones ,
Thank you for your viewpoint and philosophies. As Dr. Björn pointed out, there is somewhere a special fund with really special expertise that sets that fund apart. But it is very hard to find and to seperate skills from luck.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Sue Beasley
Hello @SueBeasley ,
As you pointed out, all investments have their risks. Investors are recommended to take on the risks that suit their tolerance. Investors aim to optimise their satisfaction (or utility function) given their constraints.
Bonds themselves have risks, e.g., default risk, interest rate risk, macro economic risks. They are relatively safer... -
Anh T. Nguyen replied to Sue Beasley
Hello @SueBeasley ,
Surely, practice will help. Also, understanding the key logic usually helps in financial challenges.
Best regards,
Anh T. Nguyen -
Hello @DavidF ,
Glad that you find the course material helpful!
You are right. Financial institutions have much better ability to refinance compared to individuals. One of the main business models is to charge the difference in rates (deposit vs. lending, short end vs. long end, exchange rate) etc. However, new technology has come in and allows for more...
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Anh T. Nguyen replied to David F
Hello @DavidF ,
Great to hear that you understood! Investing in normal positive interest rate environment, the time value of money plays a significant role. Currently, the interest rate is very low or negative, the concept is an unprecedented event.
"Sweden’s central bank was the first bank to use negative interest rates in July 2009, when the Riksbank...
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Hello @RaymondLebona ,
Surely fintech has allowed to enable the world most unbanked population having access to the financial system. Stay tuned for coming week on fintech.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Raymond Lebona
Hello @RaymondLebona ,
Derivatives as the names says, derive the values of some other underlying instruments e.g. stocks, bonds, interest rate etc. It is itself useful in a well functioning financial market to allow parties with different capabilities to cooperate/exchange. Derivatives when used wrongly can be detrimental as we see in the GFC...
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Anh T. Nguyen replied to Imam Arif Huskic
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Hello @PaulJones ,
Technology clearly reshapes many fields in society e.g., financial technology (mobile banking, internet banking, robotic advisers), property technology (proptech), education technology (edtech)...everything tech. Personally, I think tech will be the main force to change/modify/upgrade our society in the years to come. One of the roles of...
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Anh T. Nguyen replied to Paul Jones
Hello @PaulJones ,
As demonstrated in 4.6, from the mathematical perspective, there exists somebody who is exceptionally successful, even if their odd is 50/50 due to the large number of participants. And that same one who succeeds gets publicity.
So our debate remains. Interestingly, it is impossible to tell for sure if the success is due to luck or...
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Anh T. Nguyen replied to Sarah M
@SarahM, we are happy that you argue and ask questions! It is critical to your learning.
Best regards,
Anh T. Nguyen -
Hello @LINALAIZER ,
Congratulations! Indeed, interest rate is instrumental in financial management, being present from the everyday life mortgages to buy house to asset pricing, ranging from bonds, equities, real estate, derivatives. In our course, we will teach you about role of central banks, and how to interpret negative interest rate environments. ...
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Anh T. Nguyen replied to Robin Suang
Hello @RobinSuang ,
Glad that you learn. Stay tuned for coming weeks' interesting topics!
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Susanne Cochary
Hello @SusanneCochary ,
Gold is traditionally a safe haven for investors. For example, in case of wartime, people cannot carry their land but they can carry gold. That is why the current war situation pushes the demand of gold up to 2000 USD per ounce. Gold is also a good hedge against inflation. Why? previous comments in our course has addressed this....
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Hello @PaulJones ,
Modern researchers still look at risk/rewards and try to model these parameters in the most optimal way. For example, we try to integrate risk aversion coefficient in to asset pricing model, which essentially is an optimization problem. We try to maximize utility function, whereby risk aversion coefficient is one key parameter.
If you...
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Anh T. Nguyen replied to Mateja Stojanović
Hello @MatejaStojanović ,
Systematic risks cannot be diversified away while idiosyncratic risks can be diversified away by hedging, i.e. transfering the risk to another party.
It is not conflicting with whether one actively decides to take on the specific risk or not.
Best regards,
Anh T. Nguyen -
Anh T. Nguyen replied to Jossie S
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Anh T. Nguyen replied to Brian Healey
Hello @BrianHealey ,
Integrating ethics to financial education and strengthening regulations have been on going, especially after the GFC 2008. It is way harder now to open investment funds, conduct auditing activities, conduct reporting activities, etc.
Still, there are some scandal every now and then.
Humans can learn and many activities follow non...
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Anh T. Nguyen replied to Brian Healey
Hello @BrianHealey ,
Very good that you make arguments and creating food for thoughts.
In our course material, we mentioned an established school of thought by Goetzmann (2017). He "shows how finance was present at key moments in history: driving the invention of writing in ancient Mesopotamia, spurring the classical civilizations of Greece and Rome to...
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Anh T. Nguyen replied to Brian Healey
Hello @BrianHealey ,
Usually, there are two types of investors (i) financial investors who invest to make profit e.g. private equity firms buy another distressed firm to reorganize, restructure, cut cost and sell it forwards to recognize higher returns. (ii) strategic investors who buy or invest to expand the business and make the business itself better....
