Wizest was built to empower anyone to invest like a financial expert–through financial experts! Nevertheless, many of our users want to learn about the world of finance for themselves. Therefore, we’ve compiled this cheat sheet of finance and investing terminology. You may see them appear in the posts and bios of our Wizest experts. (When you’re ready, check out these books and podcasts to learn more!)
Stock – An ownership piece of a company that can be bought and sold.
Bond – A piece of debt, usually of a company or country, that can be bought, sold, or held until a certain point in time (i.e. the maturity date).
Security – The group term to refer to both stocks and bonds (and sometimes other less common financial goods too).
Earnings report – Regular updates released by companies that include information like income and sales.
Dividend – A payment made to people who own the stock of a company, typically each quarter. The amount varies by company and stock type.
Mutual fund – Groups of people pooling their money together for experts to buy stocks and other securities. Can be bought similarly to a stock, but sometimes at a particular minimum or particular time.
Index or stock market index – A collection of important stocks that represent something about the overall stock market.
ETF or exchange-traded fund – Similar to a mutual fund, but instead these are bought and sold just as easily as stocks.
Hedge fund – Similar to a mutual fund, but typically buying more complex financial goods and using more complicated investing strategies.
Financial advisor – A trained professional that has passed exams from the Financial Industry Regulatory Authority (FINRA) allowing them to provide financial advice.
Financial analyst – Someone who examines financial data to find good deals for buying and selling.
Financial planner – Similar to a financial advisor, but focusing more broadly on personal financial goals, not just investments.
Commodity – Large quantities of goods that can be bought and sold, like sugar, oil, and gold.
AUM or assets under management – The total amount of money that investors have given to a financial expert or fund.
Money market fund – Similar to a mutual fund, but focusing on extremely low-risk financial goods, like very stable government bonds.
Short-term capital gains – Profit made from the buying and selling of something in less than one year. Importantly, these are taxed just like regular income.
Long-term capital gains – Profit made from the buying and selling of something across more than one year. These are typically taxed less than regular income or short-term capital gains.
