Investing can be a daunting task, especially for those who are new to the world of finance. There is a lot of jargon to learn, and it can be difficult to know where to start.
This glossary of essential tech and finance terms is designed to help investors better understand the language of investing and financial technology. It covers a wide range of terms, from basic financial concepts to more complex tech terms.
Glossary
Asset: Anything of value that can be converted into cash, such as stocks, bonds, and real estate.
Bear market: A period of declining stock prices, typically defined as a decline of 20% or more from recent highs.
Bull market: A period of rising stock prices, typically defined as an advance of 20% or more from recent lows.
Cryptocurrency: A digital or virtual currency that uses cryptography for security.
Dividend: A portion of a company’s profits that is paid out to shareholders.
Exchange-traded fund (ETF): A basket of securities that trades like a stock on an exchange.
Initial coin offering (ICO): A type of crowdfunding event in which a company sells cryptocurrency tokens to investors in exchange for fiat currency or other cryptocurrencies.
Initial public offering (IPO): The first sale of a company’s stock to the public.
Investment: The purchase of an asset with the expectation of generating income or capital appreciation.
Market capitalization: The total value of a company’s outstanding shares.
Mutual fund: A type of investment company that pools money from investors and invests it in a basket of securities.
Option: A contract that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date.
Portfolio: A collection of investments held by an individual or institution.
Risk: The potential for loss associated with an investment.
Return: The profit or loss generated by an investment.
Stock: A share of ownership in a company.
Volatility: The measure of how much the price of an asset fluctuates over time.
5 things to remember before investing
- Do your research. Before you invest in anything, it is important to do your research and understand the risks involved.
- Start small. Don’t invest more money than you can afford to lose.
- Diversify your portfolio. Don’t put all your eggs in one basket. Invest in a variety of assets to reduce your risk.
- Invest for the long term. Don’t try to time the market. Instead, focus on investing for the long term and let your investments compound over time.
- Rebalance your portfolio regularly. As your financial situation and investment goals change, you need to rebalance your portfolio to ensure that it still meets your needs.
What information do investors need to know?
Investors need to know a variety of information, including the company’s:
- financial performance
- competitive landscape
- management team
- industry trends
- overall economic outlook
What 3 things should you consider when investing?
When investing, you should consider the following three things:
- Risk tolerance. How much risk are you comfortable taking?
- Time horizon. How long are you planning on investing for?
- Financial goals. What are you hoping to achieve with your investments?
Investing can be a great way to build wealth over time. However, it is important to remember that investing is risky. You can lose money on your investments.
Before you start investing, it is important to do your research and understand the risks involved. You should also develop an investment strategy and stick to it.
Dil Bole Oberoi
