Paris Match: Friday, May 17th 2013
Imagine investing with total awareness and confidence on the full universe of financial products. Now possible thanks to a simple indicator developed by cfinancials, investors can find the “safety” of any instrument ie. funds, stock, structured products, bonds, ect...in real time. Everyone can now make fully-informed decisions within their own risk comfort zone. Today, people everywhere, no matter their knowledge of markets or investing, can quickly and easily make sound investment decisions on how, when and where to invest without having to consult their bankers, advisors or friends. At 42, Michael Heijmeijer, a capital markets specialist with 20 years of experience in the financial sector, has launched the Safety Margin Indicator (SMI), a dynamic rating system that provides a "Safety Indicator" evaluated on a scale of 0 to 100% (low to high safety) on 12 million financial products globally.
How did you get the idea ?
After 20 years of working in banking and financial institutions, I resolved to find an indicator that is transparent and objective in the evaluation of product safety without taking into account unfounded recommendations, biases or hidden agendas. I wanted something based solely on facts.
To know at any point in time, the safety of a product linked to market facts and not biased information, is of great interest to me because it serves three purposes: trading, monitoring and instant recognition in the safety of any product. That’s power for the people. Since I couldn’t find one, I created it.
What is surprising that it is meant for the public
90% of the money invested in capital markets comes from public, but with only 1% visibility on what is actually happening behind the scenes. The other 89% is filled with emotions, opinions and misleading information usually driven by personal agendas of those in positions of power. It is impossible for a non-professional—or really even for a professional in today’s world— to follow the speed and impact of capital markets driven by modern technology and systems.
Today we have few choices, and none are without their failings. We can listen to an advisor, banker or friends—none of whom has real-time information or deeper insights than the next. We can try to glean trends and recommendations from the media on products, but even they can’t take into account all the real-time data ‘out there’. We have to trust the analysis and vision of others, and often suffer the consequences on our wallets or our savings/retirement.
The SMI frees and empowers people; it allows anyone to actively participate in the markets without having to understand the complexity, trading aspects or market forces affecting products worldwide. Each individual decides on his or her safety threshold for any given product, thereby becoming their own master in terms of acceptable risk levels—as it happens, and without bias.
How so ?
We use big data, cloud computing and product intelligence on 15 million products which includes shares, funds, derivatives all the way to ethical products to be rated on our "safety" scale from 0 - 100%. The choice of product and time of transaction can now be made in full awareness of any safety/risk. Furthermore, the latest information technology allows for an interactive alerting system once risk or safety levels have been reached. Investors can then decide whether to hold, buy or sell a product.
This changes the relationship between and client and banker. Both are now playing on a level field and the relationship is equitable. The client no longer has to endure classic advisors telling them to not worry, “It is not that risky and it will come back up again. For the first time in history, the clienthas the information needed for sound decision making. He is informed and in control.
Is there any subjectivity in the rating ?
The rating is entirely objective as it only takes into account factual market data. It is not about the recommendation (read: opinion) of an analyst, but what trading and fundamentals “say” about a product. The rating takes into account several factors: price changes, liquidity, price history, volatility, fundamentals, correlation, contagion and systemic risk of the issuer or underlying of each product. Every product is also displayed with its rating history to allow for instant assessment on the overall safety of the product.
The SMI has generated interest from institutions other than market participants. The European Authorities are demanding more transparency in financial markets and are also working on a draft for requiring product risk on all financial products. Investors are confronted with massive amounts of conflicting, confusing, outdated information. The SMI takes away the guesswork, giving investors access to objective, accurate, real-time safety indicators for financial security and the confidence needed to make decisions in their own best interest.