Korea Certified Fund Investment Advisor (펀드투자권유자문인력) common mistakes
Korea Certified Fund Investment Advisor (펀드투자권유자문인력) · Understand the traps and how to avoid them.
Calling VaR the maximum possible loss
Losses beyond the specified quantile remain possible, and model assumptions can fail.
What to do instead
State the confidence, horizon and tail limitations.
Calling several correlated holdings fully diversified
Different names can still share sector, market or currency risks.
What to do instead
Assess underlying exposures and their relationships.
Treating suitability as an age-only decision
Resources, obligations, objectives and risk preferences differ among clients of the same age.
What to do instead
Assess the whole client situation and document the rationale.
Ignoring the option premium
A positive expiry payoff is not necessarily a positive net investment profit.
What to do instead
Deduct the stated premium and relevant costs under the exercise assumptions.
Multiplying a multi-day index return by a daily target
Compounding changes the relationship across several reset periods.
What to do instead
Calculate each daily fund movement and compound them.
Calling a hedge risk-free
The hedge can leave basis, counterparty or other risks and can limit favorable outcomes.
What to do instead
Identify precisely which exposure is reduced and what remains.
Equating a distribution with guaranteed profit
A payment can come from different sources and does not eliminate a change in asset value.
What to do instead
Explain the source, sustainability and total-return context.
Ignoring refinancing because current rent covers interest
Debt maturity and future financing terms can create a separate liquidity problem.
What to do instead
Assess the maturity schedule and adverse funding scenarios.
Treating an appraisal as immediate cash
A valuation estimate does not prove that a sale can occur quickly at that figure.
What to do instead
Assess liquidity, transaction timing and valuation uncertainty.