Window Dressing

Came across this phrase very often in Cbox recently. Decided to look up the meaning of this word.

From investopedia,

A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings.

http://www.investopedia.com/terms/w/windowdressing.asp#axzz1qaZw08rC


In short, BBs are trying to beautify their funds/portfolio by selling losses and purchasing high flying stocks so that it look nice.

So Smart!

Investment Grading

Recently, many people would came across with the headliners in the news that state, S&P downgraded XXX country to AA grading or BB grading etc. I guess many people do not understand what it really mean.

I did a search and found the following:

‘AAA’—Extremely strong capacity to meet financial commitments. Highest Rating.
‘AA’—Very strong capacity to meet financial commitments.
‘A’—Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.
‘BBB’—Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
‘BBB-‘—Considered lowest investment grade by market participants.
‘BB+’—Considered highest speculative grade by market participants.
‘BB’—Less vulnerable in the near-term but faces major ongoing uncertainties to adverse business, financial and economic conditions.
‘B’—More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.
‘CCC’—Currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments.
‘CC’—Currently highly vulnerable.
‘C’—Currently highly vulnerable obligations and other defined circumstances.
‘D’—Payment default on financial commitments.

Hope that the information will be useful when you read financial news in future.