How to speak investment-ese

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

Adam Zoll 9 February, 2015 | 6:00PM
Facebook Twitter LinkedIn

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.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free
Facebook Twitter LinkedIn

About Author

Adam Zoll

Adam Zoll  Adam Zoll is an assistant site editor with Morningstar.com

© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies