For novice investors, investing can be threatening to invest money. Nervousness within the investors that automatically arises with taking risky decision and knowing you may not in future get all of your assets back. But arguably, what is even more intimidating than investing jargon are phrases like expense ratio and asset allocation, which average investors should easily understand but often come off as confusing or just plain foreign.
Today’s market environment can be so unfamiliar after years without them being publicly talked about before the 2008-2009 crash when many people either lost everything from their 401(k) plan investments or saw their savings account balances dwindle significantly overnight.
If you’re interested in investing but feel like your money might not be welcome, maybe it’s time to learn the language first. This is by no means a comprehensive list of terms that will make you more confident about investment; these are just some basic ones to start with.
Socially Responsible Investing Definition:
Socially responsible or “green” ethical investing looks for ways to maximize its profits while doing something good in the world. Socially conscious investing, or green investing as it is commonly called, can help generate more money to make changes and improve lives. Hence, people can live better lives not just tomorrow but today too.
What Is a Bond?
A bond is a loan from an investor to a borrower, such as a company or government. The business uses the money to fund its operations and eventually pays back the debt with interest over time. However, it can be difficult for many companies with limited resources in times of crisis. Bonds are top-rated among investors because they offer more stability than stocks when faced with uncertain market volatility and provide higher yields than bonds issued by other countries due to increased risk associated with currency fluctuations.
What Is a Mutual Fund?
Mutual funds are a way to invest your money in stocks, bonds, or other assets. The fund brings together the investment of many people and invests in it as one company. You can buy shares that represent part ownership in this fund that owns all types of investments for you, so you don’t have to deal with any decisions on where to put your hard-earned cash!
What Are Index Funds?
Index funds are a popular option for most investors because they provide the benefits of diversification and lower fees. Index fund managers invest in index-based securities, such as stocks or bonds that mimic an index’s performance to produce profits with less risk than other investment choices. You can get started by learning how these indexes work before investing in one yourself!
What Is a Hedge Fund?
A hedge fund is a mutual investment stock that trades in more complexity and range assets than the average school student. That’s because, rather than just betting on one side of an equation like stocks or bonds, these funds make wide use of advanced trading techniques to try for added financial success-including short-selling and leveraging up their investments.
What Are ETFs?
ETFs are a type of exchange-traded product and investment fund. ETFs differ from mutual funds because they’re imported on stock interactions through the whole day, although mutual funds are purchased and sold dependent on their cost at the end of the trading day. Investors can purchase an index or trade various markets through ETF products which provide exposure to different types of investments such as commodities, bonds, currencies (forex), and stocks, all with one transaction.
What Is a Bear Market?
A bear market is when a prolonged period of declining prices occurs in the stock market. This typically happens when investors are pessimistic and do not believe that anything good will happen to their investments, creating fear among other investing communities.
What Is a Bull Market?
A bull market is when stock prices rise by 20% after two declines of 20%. This means that during the upswing, asset values are rising, and investors see profit potential. Those who bought at an early low point in the cycle (good buy) will be profiting off their investments as all price points continue to increase from there on out until it hits another peak or high, which starts anew with lows.
Author bio: I’m Jaylin: Guest post service planner of Leelija and full time blogger. Favourite things include my camera, traveling,caring my fitness, food and my fashion. Email id: editor@leelija.com