As you work with your clients, you will need to be able to take complicated financial concepts and explain them in terms that are easily understood. Review industry concepts that you may not use every day so that you can confidently discuss any term the interviewer throws your way.
Here are some concepts you will want to familiarize yourself with:
- Risk/Return Tradeoff
- Asset Allocation
- Random Walk Theory
- Optimal portfolio
- Net worth
- Risk Tolerance
- Bull Market
These are all concepts you will want to familiarize yourself with. Maybe crack open that textbook you used to study for your CFA exam and quiz yourself. As you review these concepts, take some time to write out their definitions in simple terms you would use to explain it to your client.
"The most common financial concept that I find myself explaining to my clients is the Random Walk Theory. Many new investors believe that the Stock Market is somehow rigged so I like to teach them that stock prices are random, and unpredictable. The Random Walk Theory is also called the Random Walk Hypothesis."