It’s hard to get ahead financially when you can’t even speak the lingo. We often get stuck in not understanding key terms and are not able to move towards seeing financial goals come to fruition! This article and money affirmation are from the “MY MONEY MATTERS” kit.
“I Enjoy Learning About Investing”.
Believe it or not, many of my clients who never thought they would say this, take an active role in understanding their investments and feel empowered doing so. Start with this money affirmation and see what happens.
Can You Speak Finance Lingo?
Start by figuring out if you understand these key terms. Then show off to your friends and use them in a sentence. I guarantee they will be impressed.
Growth: Stocks of companies that are emerging and tend to be small. They are in a relatively new market sector, such as technology or biotechnology.
Value: Stocks of companies that trade at a lower price than the company’s earnings would seem to merit. The price of the stock tends to remain steady and they offer regular dividend payments. They tend to be safer than growth stocks
Blend: One mutual fund that holds both Growth and Value stocks.
Cap: Short for capitalization. How much the stock is worth on the stock market.
Large-cap: Market capitalization is more than $10 billion. Large-cap mutual fund is one that only holds stocks worth more than $10 billion.
Mid-cap: Market capitalization is between $3 billion and $10 billion
Small-cap: Market capitalization is less than $3 billion
Bond: An investment where you receive a fixed interest rate on a certain amount of money for a period of time. Also called Fixed Income.
Balanced: One mutual fund that holds both stocks and bonds. Also called Domestic Hybrid and Moderate Allocation.
International: Mutual fund that invests in stocks or bonds outside of the United States.
Lifestyle or Target: Mutual fund that picks a variety of different mutual funds based on a specific year – ideally the year you want to retire.
Money Market: A group of short-term treasury bonds. Considered very safe but slightly riskier than a regular savings account.
A few more money tips to get your financial lingo in place:
* If you have a financial advisor, schedule an appointment with him/her to go over all your investments and explain them in detail. Ask them to use the lingo and explain it to you.
* Pick up a copy of SmartMoney.com and look for these terms. Who knows? Maybe you will know understand those relevant investing articles?