Dollar-cost-averaging, unit-price, risk profile – unless you’ve swallowed a financial dictionary, chances are these phrases will be a mystery to you.
But if you want to be financially comfortable, especially with enough money to purchase those indulgent treats minus the shopper’s guilt, it pays to know what these words – and a few others – mean.
Here are 10 terms to enhance your financial vocabulary.
By Claire Esmond
Dollar-cost-averaging
Sadly this does not refer to the average amount spent on must have fashion accessories.
Performance
When people talk about the “performance” of, say, a managed fund, they are simply giving an indication of the historical returns - that is, how well the fund has per
Risk Profile
Despite how it sounds, a “risk profile” is not the criteria you and your girlfriends should apply to a first date. Although dating can be a risky game at times.
Aggressive
For once in your life, to be described as “aggressive” isn’t a bad thing.
Balanced
A “balanced” investor is someone who is moderately comfortable with risk, kind of like someone who is enjoying a balanced diet – munching on the carrot sticks and
Conservative
Has nothing to do with wearing a pearl necklace or a political party.
Salary Sacrifice
Although it might sound like you’re giving away your hard earned money, this couldn’t be further from the truth.
Unit
While it may describe the measure of alcohol in those tasty cocktails you enjoy, “unit” is also the way companies listed on a stock exchange divide their capital into
Liquid
”Liquid” (or liquidity) is a term used to describe when a market has a high level of trading activity characterised by the ability to buy and sell with relative ease.&nbs
Bull and bear market
Fortunately a “bull and bear market” isn’t a place where you can buy and sell dangerous animals.
The Last Word
Finally, don’t let financial lingo confuse you – many jargon terms people use are fancy ways of saying simple things.
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