decouple

  

Definition

Situation in financial markets where prices of shares and bonds move in opposite directions. During periods of low business confidence (when falling sales erode corporate profits), investors dump shares and low quality bonds in favor of high quality bonds for capital preservation. Similarly, during periods of deflation (when falling prices erode corporate profits), investors switch to bonds for income preservation.

Featured Tip

One Consideration in Building Your Business Model

One way to build a business is to find a market which is divided into categories in which certain feature subsets are unavailable, and to offer that subset. For example, traditional brokerages was divided into deep discount (inexpensive trades, without advice) and full-service (expensive trades, with advice). Although the markets later blended together, there was an opportunity for a service provider to decouple the two features and sell just the advice without the expensive trades.

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