Edit Like a System: Reduce Nominalizations in Finance Writing for Clear, Professional Investor Letters

Why Nominalizations Matter in Investor Letters

Nominalizations—nouns built from verbs or adjectives—are common in finance writing because they sound formal and compact. Words like “implementation,” “analysis,” and “performance” seem neutral and precise, but when used as the engine of a sentence, they often push the true action away from the actor. The cost is subtle yet measurable: longer sentences, heavier prepositional phrases, and vague agency. In investor communications, that bloat dilutes accountability (“who did what, when, and why”) and depresses readability on scales like Flesch–Kincaid. The result can be a letter that sounds official but forces readers to work harder to extract meaning.

Reducing nominalizations does not mean abandoning finance vocabulary. The goal is to place actions in verbs and actors near those verbs while preserving terms of art that label concepts (e.g., inflation, duration, valuation). When you treat nominalizations as a variable you can control—much like leverage or duration—you gain a repeatable editing lever. A systems mindset helps here: establish a workflow you can run on any draft and measure its effect. The framework below—Detect, Decide, Rewrite—turns an abstract style preference into a concrete, auditable practice.

Step 1 – Detect: Build a Rapid Identification Routine

The first step is a fast, reliable scan for nominalizations that are likely inflating sentences. Train your eye to notice the typical suffix patterns: -tion, -sion, -ment, -ance/-ence, -ity, -al, and -ure. These endings often signal that a verb or adjective has been converted into a noun. Many of these nouns come directly from the verbs you use daily in finance analysis: assess → assessment, analyze → analysis, decide → decision, invest → investment, perform → performance, execute → execution. When these nouns sit at the center of a clause, they typically drag in helper words—“make,” “conduct,” “perform,” “do,” “provide,” “undertake,” “effect,” “deliver”—and long prepositional strings, which together increase sentence length without adding information.

Why does this pattern matter? In investor letters, the audience expects a clear chain of reasoning tied to decisions and outcomes. Nominalizations break that chain. Instead of saying “we analyzed cash flows and increased the position,” a draft might read “a comprehensive analysis of cash flows was conducted, leading to an increase in the position.” The second form spreads key information across more words, inserts passivity, and often hides the actor. Readability tools penalize this pattern because it raises clause complexity and lowers the ratio of strong verbs to total words. More importantly, it introduces ambiguity: if “an analysis was conducted,” who conducted it? If “a reduction was implemented,” who acted—and can the result be attributed to the team or to market forces?

Create a mini-checklist to make detection automatic:

• Scan for suffix patterns and highlight them. This quickly reveals concentrations of nominalizations in paragraphs.
• Flag empty verbs near those nouns: make, conduct, perform, provide, undertake, effect, deliver. These often signal that the real action has been pushed from a verb into a noun.
• Underline prepositional chains attached to the noun: strings like “of,” “in,” and “for” that grow after a nominalization. These chains are a hallmark of drift toward vagueness.
• Identify missing or distant agents. If the sentence does not name the doer near the action—or pushes the agent to a trailing prepositional phrase—you likely have a nominalization problem.

When you run this detection routine, think in terms of throughput: you want to scan quickly across a draft, not debate revision choices yet. Your aim is a first-pass inventory. If you use digital tools, the “Find” function with the common suffixes accelerates this step; combined with style checkers that flag passive voice, you can surface clusters where intervention will pay off.

Step 2 – Decide: What to Keep, What to Convert

Not all nominalizations deserve removal. In finance writing, some nouns of this type are terms of art that label stable concepts. The deciding question is whether the noun is best understood as a concept label or whether it is smuggling an action that should be expressed as a verb.

Keep nominalizations when they name concepts, metrics, or instruments that readers expect to see as nouns. Words like inflation, valuation, duration, convexity, correlation, dispersion, or capitalization function as technical labels. Turning them into verbs would distort meaning or jar the reader. Similarly, if the actor genuinely doesn’t matter or is unknown—especially in macro descriptions like “Inflation accelerated in Q2”—the noun can stay. In headings, figure labels, and callouts, the nominalized form often improves scanability: “Portfolio Allocation by Sector” is clear and concise in a chart.

Convert nominalizations when they obscure agency or inflate syntax. If you see phrases like “the execution of the strategy,” ask whether the point is that someone executed a strategy. If so, move the action into a verb and name the actor directly. Long chains of prepositions—“the completion of the acquisition of…”—indicate that the grammar is carrying unnecessary weight. If the clause’s main message is an action central to investing—allocate, hedge, diversify, trim, add, sell—favor the verb. Clarity improves when the verb sits close to its subject and object: “We trimmed exposure by 150 bps” is tighter and more accountable than a nominalized alternative.

Use a simple decision mini-matrix to standardize your choices:

• Is the noun naming a concept or metric? If yes, it probably stays.
• Is the sentence fundamentally about someone doing something? If yes, convert the noun back to a verb and add the actor.
• Will converting reduce words and clarify who did what? If yes, convert.
• Would verbing the term distort technical accuracy or clash with genre norms? If yes, keep the noun.

This step protects accuracy while driving readability. It acknowledges that investor-grade prose must balance precision with clarity. You are not simplifying the content; you are expressing the same reasoning with cleaner mechanics that place decisions and outcomes in the foreground.

Step 3 – Rewrite: Restore Actors and Verbs Without Losing Precision

Rewriting is where you realize the gains. Apply targeted transformations that convert heavy nominalized structures into active, precise sentences aligned with investor expectations.

First, move from noun-centered clauses to verb-centered ones with explicit agents. If your draft contains “the completion of the acquisition of X was achieved,” rewrite so the actor sits next to the verb: “We completed the acquisition of X.” This transformation shortens the sentence, removes the passive frame, and focuses the reader on the decision and its timing. The agency is now unambiguous.

Second, replace empty-verb-plus-nominalization patterns with strong, specific verbs. Forms like “conducted an analysis” or “performed an evaluation” create distance between the actor and the action. Instead, commit to the action directly: “We analyzed,” “We evaluated,” “We assessed.” Pair these strong verbs with direct objects that preserve the financial detail (cash flows, unit economics, yield curve shifts) so you maintain the letter’s technical credibility while reducing friction.

Third, convert passive nominalizations into active clauses. Sentences like “a reduction in leverage was implemented by management” bury the verb and weaken accountability. Reframe as “Management reduced leverage.” This change brings the decision-maker to the front and supports a narrative of deliberate action. Investors read for accountability; placing the actor next to the verb reinforces that accountability.

Fourth, compress prepositional chains into direct objects. Where you see “the execution of the exit of two positions,” prefer the direct form “We exited two positions.” Prepositional chains are a primary driver of length and opacity. Each preposition adds processing cost without necessarily adding meaning. By collapsing the chain, you simplify the structure and make the outcome easier to grasp on first read.

Fifth, hedge claims with precision rather than abstraction. Finance prose often leans on abstract business nouns like “optimization,” “recalibration,” or “rationalization.” Replace these with measurable actions tied to units investors recognize: basis points, percentages, maturities, multiples. “We trimmed exposure by 150 bps” communicates both the action and scale, anchoring the statement in verifiable metrics.

Apply style guardrails to maintain a professional tone:

• Keep the formality appropriate for investor communications; avoid conversational fillers.
• Use concrete actors: we, the fund, management, the board, the Fed, customers, suppliers. Name the responsible party when the context requires it.
• Preserve numerical specificity and technical markers (bps, yields, maturities, EV/EBITDA, net leverage) and place them as close as possible to the verb they modify to consolidate meaning.

Measure the outcome after rewriting. Two easy metrics help you validate improvement:

• Nominalization density: count the number of nominalized forms divided by total words. Aim for a meaningful reduction draft-over-draft, not a fixed universal target.
• Flesch–Kincaid grade: for professional investor letters, a grade around 10–12 is typically accessible without losing technical precision, depending on your firm’s style. As nominalizations decrease and verbs strengthen, you should see grade levels move toward that range.

Integrated Micro-Workflow: Running Detect–Decide–Rewrite in Practice

Turn the steps into a compact loop you can run on any paragraph: 1) Detect. Use suffix scans to highlight likely nominalizations. Mark empty verbs and long prepositional strings. Do not edit yet—just surface potential friction points. 2) Decide. Apply the mini-matrix. Keep concept nouns (terms of art, metric labels). Convert action nouns that hide agency or inflate syntax. Make decisions consistently and document any exceptions that are driven by technical or regulatory constraints. 3) Rewrite. Implement the transformations: Noun → Verb + Agent; Empty Verb + Nominalization → Strong Verb; Passive → Active; Preposition Chain → Direct Object; Abstract Noun → Measurable Action. Then re-check the paragraph for active voice share and word count. Confirm that numbers and qualifiers sit near their verbs.

This loop is deliberately lightweight so it can fit into a busy production schedule near quarter-end or earnings season. The goal is not to perfect every line but to reduce systemic friction. Over time, the loop becomes a habit, and drafts emerge with fewer nominalizations from the start, reducing editing overhead.

Tools and Checklists to Operationalize the System

Operationalizing the workflow requires tools that make detection fast and improvement measurable. Start with manual tools you already have:

• Use the Find function to search “tion,” “sion,” “ment,” “ance,” “ence,” “ity,” “al.” Skim each hit to confirm relevance.
• Create margin marks to track edits: [N] when you spot a nominalization, [A] when you restore or add an agent, [V] when you strengthen a verb. These tags let you audit your own changes and quantify progress.

Layer in digital tools to scale:

• Grammar and style checkers such as Grammarly or LanguageTool flag passive voice, hidden verbs, and wordiness—useful proxies for nominalization hotspots.
• Readability calculators like Hemingway, Readable, or Flesch–Kincaid scripts in Word/Docs provide grade-level feedback. Record scores before and after edits to build evidence of improvement.
• Simple macros or regex scripts can highlight suffixes in bulk, helping you visualize density patterns in longer sections. Even a color-coded pass can reveal paragraphs that need attention.

Finally, adopt a pre-send checklist to enforce quality control before the letter goes to compliance or clients:

• Is the FK grade within your target range for the audience and firm style?
• Has nominalization density decreased from the prior draft?
• Is the active voice share at or above roughly two-thirds of sentences, where appropriate for the content?
• Do key actions have clear, named agents?
• Have you preserved terms of art and concept labels correctly?
• Are key numbers intact, and have you placed them close to the verbs they qualify?

This checklist functions like a risk control: it doesn’t eliminate all issues, but it reduces variance in quality across authors and cycles.

Capstone: Make the Gains Visible and Measurable

To build confidence in the system, run a capstone mini-task on a short investor-letter paragraph. Apply Detect–Decide–Rewrite and record three metrics: nominalization count before/after, passive sentences before/after, and Flesch–Kincaid grade before/after. Set acceptance thresholds that reflect meaningful improvement without pressuring the prose into oversimplification. As a guideline, aim for a reduction of at least 30% in nominalizations, a 10-point increase in active-voice share, and a grade-level shift toward the 10–12 band suitable for professional readers.

Tracking these numbers over time creates a feedback loop. You will see which sections—macro commentary, portfolio changes, outlook—tend to accumulate nominalizations and can preemptively adjust your drafting. You will also build an internal style baseline, making it easier for teams to maintain consistency across authors and quarters.

Connecting to a Larger Editing System

Reducing nominalizations is only one lever in a broader editing system for finance writing, but it is a high-yield lever because it simultaneously clarifies agency, compresses sentences, and raises readability scores. When paired with complementary practices—tightening modifiers, aligning paragraph structure to investor questions, and front-loading conclusions—you get disproportionate gains in reader comprehension and trust.

Adopting the Detect–Decide–Rewrite workflow transforms editing from a subjective preference into an operational process. It respects finance conventions by preserving the nouns that must stay and focuses effort on the places where action and accountability should be unmistakable. Over successive letters, you will notice smoother phrasing, faster drafting, and stronger narrative cohesion around decisions and results. That improvement is not cosmetic; it is central to how investors perceive your clarity of thought and the discipline behind your process.