What Actuaries Need to Know About Lipstick, Zombies, and Pac-Man


The worlds of finance and actuarial science are filled with technical terms that can be a mystery for the newcomer or outsider. Acronyms abound, and even experienced actuaries may find it difficult to stay abreast of changing trends and new developments.

Investopedia aims to inform and explain with its extensive dictionary, which is packed with definitions useful to both financial beginners and experts who might be seeking a one-paragraph explanation of an esoteric concept.

For instance, not everybody will know that experts can use the so-called lipstick effect to judge the condition of an economy (if times are hard, the theory goes, people will turn to low-cost indulgences, so higher lipstick sales mean that the country is struggling). Or they may have heard about zombie banks, and been left in confusion (such banks have negative net worth, and are only kept alive by bailouts).

Here visitors can find the kind of entries and names that would be unlikely to appear on most websites involving financial data. For example, Jennifer Lopez—slang for a rounding bottom in a stock's price pattern—is included alongside Jekyll and Hyde—a term referring to the strengths and weaknesses of a company's financial statements or an asset that suddenly increases or decreases in value. Kangaroos brush shoulders with the Katie Couric Clause, a proposal that publicly-traded companies should disclose not only the salaries of their top five executives, but also those of top-earning non-executives.

Each entry is given a full definition, followed by an explanation of that item's history and its use or relevance in the real world. For instance, the official role of the Canada Revenue Agency (CRA) is described, then Investopedia explains: "Like the Internal Revenue Service, the CRA is the definitive source on current Canadian tax laws, how they are interpreted and how they are applied."

Once visitors have finished dipping into the dictionary to learn about Dagmar, Saber currency, Obamanomics, the Pac-Man defence, the Icarus factor, Walrasian markets, and much more, the site offers a broad range of advice and insight on a range of financial issues. Investment news is accompanied by advice on such subjects as capital budgeting, while market updates are supported by analysis from expert writers.

The Personal Finance section includes articles on topics like online retail tax, whether income tax is a "class tax", and top female chief executive officers. It also offers advice on life stages like retirement, explaining why pension plans can include sovereign debt and how to profit from risk.

Further information is offered by various tutorials on financial topics, while a stock simulator allows visitors to try investing for themselves with an imaginary fund of $100,000.

So, the next time you need to explain about the razor–razorblade model or transumerism, or discover what problem is faced by a yupcap, Investopedia will be able to help.

Pros: the scope of the writing, which covers a very broad audience; the clear design.

Con: some information is repeated across various sections.

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http://www.investopedia.com