How to speak investment-ese

Confused by financial industry jargon? We're here to help.

Adam Zoll 9 February, 2015 | 6:00PM
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Question: When reading financial reports from Morningstar or from fund companies I sometimes come across terms that are unfamiliar or unclear to me. Can you provide a list that explains commonly used investing terms so that novice investors like me can understand what the pros are discussing?

Answer: Newbie investors are often thrown for a loop by some of the jargon investing professionals use, so much so that it can feel almost like listening to a foreign language. In some cases investment industry jargon is used as short-hand for complex concepts--such as when a pro mentions MPT, an acronym for Modern Portfolio Theory, a sophisticated investment approach aimed at optimizing a group of holdings to balance performance and risk. In other cases jargon is simply used as a synonym for more commonly used verbiage -- why the financial-services industry prefers the term "equities" to the more colloquial "stocks" seems more a matter of convention than anything else.

There's no Rosetta Stone edition that translates financial industry-speak to English (at least, not yet), but the following glossary is a start. Of course, this is just the tip of the iceberg, and new investing terms come into vogue all the time. But at a minimum, the terms defined below should help those who are new to investing or who sometimes are left scratching their heads after reading a fund manager's quarterly message.

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Adam Zoll

Adam Zoll  Adam Zoll is an assistant site editor with

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