Definition of 'Plutocracy'

A government controlled exclusively by the wealthy either directly or indirectly. A plutocracy allows, either openly or by circumstance, only the wealthy to rule. This can then result in policies exclusively designed to assist the wealthy, which is reflected in its name (comes from the Greek words "ploutos" or wealthy, and "kratos" - power, ruling)

Investopedia explains 'Plutocracy'

A plutocracy doesn't have to be a purposeful, overt format for government. Instead, it can be created through the allowance of access to certain programs and educational resources only to the wealthy and making it so that the wealthy hold more sway. The concern of inadvertently creating a plutocracy is that the regulatory focus will be narrow and concentrated on the goals of the wealthy, creating even more income and asset-based inequality.

Definition of 'Plutocracy'
A government controlled exclusively by the wealthy either directly or indirectly. A plutocracy allows, either openly or by circumstance, only the wealthy to rule. This can then result in policies exclusively designed to assist the wealthy, which is reflected in its name (comes from the Greek words "ploutos" or wealthy, and "kratos" - power, ruling).

Investopedia explains 'Plutocracy'

A plutocracy doesn't have to be a purposeful, overt format for government. Instead, it can be created through the allowance of access to certain programs and educational resources only to the wealthy and making it so that the wealthy hold more sway. The concern of inadvertently

creating a plutocracy is that the regulatory focus will be narrow and concentrated on the goals of the wealthy, creating even more income and asset-based inequality.

Read more: http://www.investopedia.com/terms/p/plutocracy.asp#ixzz2JLO2aAed

Cult Brand
A product or service that has an energetic and loyal customer base. A cult brand, unlike others, has customers who can be described as near-fanatical, true believers in the brand and may feel a sense of ownership or vested interest in the brand's popularity and success. Cult brands have achieved a unique connection with customers, and are able to create a consumer culture that people want to be a part of. Examples of modern cult brands include the Mini Cooper, HarleyDavidson, Vespa, Zappos and Apple.

Investopedia Says: A brand, by definition, is a distinguishing logo, mark, sentence, symbol or word that identifies a particular product. Companies use various strategies to improve brand recognition and build brand equity. Very recognizable brands include Nike, Coca-Cola and Microsoft.

Cult brands are different from fads. A fad is a short-lived "craze" where a particular product suddenly gains a lot of attention among a large population, marked by a temporary and excessive enthusiasm and then just as quickly fizzles out of style. Where fads are unsustainable and last only a short period of time, cult brands typically begin small and gradually build a steady following

Definition of 'Risk Parity'

A portfolio allocation strategy based on targeting risk levels across the various components of an investment portfolio. The risk parity approach to asset allocation allows investors to target specific levels of risk and to divide that risk equally across the entire investment portfolio in

order to achieve optimal portfolio diversification for each individual investor. Risk parity strategies are in contrast to traditional allocation methods that are based on holding a certain percentage of investment classes, such as 60% stocks and 40% bonds, within one's investment portfolio.

Investopedia explains 'Risk Parity'

The risk parity approach to portfolio asset allocation focuses on the amount of risk in each component rather than the specific dollar amounts invested in each component. In other words, risk parity focuses not on the allocation of capital (like traditional allocation models), but on the allocation of risk. Risk parity considers four different components: equities, credit, interest rates and commodities, and attempts to spread risk evenly across the asset classes. The goal of risk parity investing is to earn the same level of return with less volatility and risk, or to realize better returns with an equal amount of risk and volatility (versus traditional asset allocation strategies).

A traditional 60/40 portfolio can attribute 80 to 90% of its risk allocation to equities. As a result, the portfolio's returns will be dependent upon the returns of the equity markets. Proponents of the risk parity strategy state that while the 60/40 approach performs well during bull markets and periods of economic growth, it tends to fail during bear markets and economic slumps. The risk parity approach attempts to balance the portfolio to perform well under a variety of economic and market conditions.

Several risk parity-specific products, including mutual funds, are available, and investors can also build their own risk parity portfolios through careful research or by working with a qualified financial professional. The first risk parity fund, the All Weather hedge fund, was introduced by Bridgewater Associates in 1996.

Read more: http://www.investopedia.com/terms/r/risk-parity.asp#ixzz2JLRSzjlu

Definition of 'Robin Hood Effect'

A phenomenon where the less well-off gain at the expense of the better-off. The Robin Hood effect gets its name from the folkloric outlaw Robin Hood, who, according to legend, stole from the rich to give to the poor. A reverse Robin Hood effect occurs when the better-off gain at the expense of the less well-off.

Investopedia explains 'Robin Hood Effect'

The term "Robin Hood effect" is most commonly used in discussions of income inequality and educational inequality. For example, a government that collects higher taxes from the rich and lower or no taxes from the poor, and then uses that tax revenue to provide services for the poor, creates a Robin Hood effect.

Frame Dependence
The human tendency to view a scenario differently depending on how it is presented. Frame dependence is based on emotion, not logic, and can explain why people sometimes make irrational choices. For example, when presented with a scenario in which a sweater is being offered at its full price of $50 and a scenario in which the same sweater is regularly priced at $75 but on sale for $50, many consumers would perceive the latter as a better value even though in both situations they are being asked to pay the same price for the same sweater. Thus a real-life application of frame dependence is the use of strategic pricing by retail stores to influence consumers' purchasing behavior.

Investopedia Says: Frame dependence is one component of psychologist Daniel Kahneman's Nobel Prize-winning prospect theory, a major contribution to behavioral economics. Along with co-researcher Amos Tversky, Kahneman showed several cognitive biases that cause people to make irrational decisions, including the anchoring effect, loss aversion, mental accounting, the planning fallacy and the illusion of control.