Many if not most finance executives, students, and therefore laypersons consider finance on a very short-term basis. Trading is exciting but it could be argued it is a zero-sum game where for every agent’s winnings must be associated a loss. In the process, prices are formed and markets offer liquidity and these are two important functions of markets. Yet, they arguably serve a higher more crucial function.
In our view, the core function of finance is indeed to connect the needs of long-term savers with those of long-term investors.
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