Decoding Fifty Investment Terms

Any new endeavor — from rock climbing to investing — means getting familiar with new words and phrases.

Some investment terms may seem complex, but this list will take the mystery out of the most common investing terminology, so you can feel even more confident as you start your investing journey. 

Alpha is used to gauge the success of an investment strategy, portfolio, portfolio manager, or trader compared with a relevant benchmark.

1. Alpha

An asset is anything that holds value that can be converted to cash. Personal assets might include your home, a car, other valuables.

2. Assets

An asset class is a group of investments with similar characteristics that is likely to perform differently in the market than another asset class. 

3. Asset Class

4. Asset Allocation Fund

An asset allocation fund is a diversified portfolio consisting of various asset classes. Most asset allocation funds have a mix of stocks, bonds, and cash equivalents.

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