Banks are the centerpiece of the financial system. Their fundamental business model is elegantly simple yet profoundly powerful: borrow money at a low rate and lend it out at a higher rate. This is often summarized as “Borrow short, lend long.” To analyze a bank as an investor, you must understand its income statement, which…
The financial sector is a vast ecosystem. To invest effectively, you need a map. The Global Industry Classification Standard (GICS) provides this structure, breaking the sector down into distinct industries. Understanding these classifications is crucial because you cannot analyze a global investment bank using the same metrics as a regional credit union. 1. Banking (The…
Welcome to the engine room of the global economy. The financial sector doesn’t manufacture goods or write code, but without it, modern commerce grinds to a halt. If you are new to investing, understanding this sector is essential. It is the circulatory system that moves capital—the lifeblood of economic growth. More than just banks and…