FINANCEVELIX / Financial learning center

Financial learning center

FINANCEVELIX / LEARN

Understand investment math before using the tools. Explore original guides, eight key terms and interactive examples with explicit assumptions.

Educational scenarios, not observed prices, fund performance or investment recommendations. Rates are assumptions and can change.

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Results: Learning guides 4 · Key financial terms 8

Learning guides

Compare simple and compound growth, and separate an assumed growth rate from a promised return.

A 20% loss needs a 25% gain to return to the starting value. Explore the changing denominator.

Learn what an expense ratio measures and why recurring charges affect the balance available to grow.

A larger account balance can still buy less. Compare nominal growth with the same value adjusted for assumed inflation.

Principal →: The starting amount to which growth is applied. In this illustration it stays fixed at 1,000 units before any growth.
Compounding →: Applying growth to a balance that includes earlier growth, instead of only to the original principal.
Drawdown →: The percentage decline from a selected high to a later value, using the high as the denominator.
Recovery gain →: The gain required from the remaining balance to regain the selected high, assuming no external cash flows.
Expense ratio →: Annual fund operating expenses expressed as a percentage of the fund’s average net assets. It does not include every possible ownership cost.
Fee drag →: The reduction in the modeled ending balance compared with a matching no-fee case, including forgone growth on deducted amounts.
Nominal return →: The change in money value before adjusting for inflation. It does not by itself measure purchasing power.
Real return →: The return after adjusting for the price-level change over the same period: (1 + nominal return) / (1 + inflation) − 1.

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