{"id":3595,"date":"2018-09-14T06:08:06","date_gmt":"2018-09-14T06:08:06","guid":{"rendered":"https:\/\/raizinvest.com.au\/investors\/?p=3595"},"modified":"2020-10-28T01:11:42","modified_gmt":"2020-10-28T01:11:42","slug":"investing-definitions-and-terms","status":"publish","type":"post","link":"https:\/\/raizinvest.com.au\/investors\/blog\/investing-definitions-and-terms\/","title":{"rendered":"Investing definitions and terms"},"content":{"rendered":"

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New to investing or want to test your knowledge? Below are some helpful investing definitions on common words related to investing.\u00a0 It would be great if there were no risks associated with investing, but there are, and because of market movements and other risk the value of investments can go up and down. To learn more about risks you should read this blog – ‘Risks of Investing’\u00a0<\/a><\/span><\/p>\n

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ETF<\/strong><\/p>\n

Short for \u2018exchange traded fund\u2019, is a security that trades like a stock on a stock exchange. It usually tracks an index of stocks, bonds or more alternative assets like commodities of infrastructure.<\/p>\n

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ETF<\/figcaption><\/figure>\n

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Dollar Cost Averaging<\/strong><\/p>\n

An investment principle of buying a fixed dollar amount into a particular investment on a disciplined regular basis. The investor purchases more shares (units) when prices are low and fewer shares when prices are high.<\/p>\n

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Dollar Cost Averaging<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

S&P 500<\/strong><\/p>\n

The Standard & Poor\u2019s index that tracks 500 of the biggest companies listed in the USA and is a favourite tool for analysts trying to understand how the US market as a whole is performing.<\/p>\n

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S&P 500<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Net Worth<\/strong><\/p>\n

The value of your assets minus any debt you owe.<\/p>\n

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Net Worth<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Compounding<\/strong><\/p>\n

Generating earnings from previous earnings, when these returns are reinvested. Such as when the dividend you previously earned on your investment starts earning market returns as well.<\/p>\n

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Compounding<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Diversification<\/strong><\/p>\n

Spreading your money among different investments to reduce the market risk.<\/p>\n

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Diversification<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Asset<\/strong><\/p>\n

Anything of value is an asset: cash, stock, a car, a house, even the money owed to you by someone else.<\/p>\n

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Asset<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Dividend<\/strong><\/p>\n

Money paid by a company back to their shareholder, out of its profits.<\/p>\n

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Dividend<\/figcaption><\/figure>\n

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Volatility<\/strong><\/p>\n

The rate at which the price of an asset changes – increases or decreases – over a given period of time. It is used as a measure of market risk.<\/p>\n

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Volatility<\/figcaption><\/figure>\n


\nLiquidity<\/strong><\/p>\n

A market’s ability to absorb a purchase or sell order for an asset without causing significant change in the asset’s price.<\/p>\n

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Liquidity<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

20-30-50 Rule<\/strong><\/p>\n

Allocate 20% of your monthly income towards goals, 50% for fixed expenses and 30% for flexible spending.<\/p>\n

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20-30-50 Rule<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

Basis Point<\/strong><\/p>\n

1 basis point is equal to 0.01% so 100 basis points is 1%.<\/p>\n

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Basis Point<\/figcaption><\/figure>\n

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Don\u2019t have the Raiz App?<\/strong><\/h3>\n

Download it for free in the App store or the Webapp below:<\/p>\n

\n
\"download-raiz-app\"<\/a>
Click to download the Raiz app<\/a><\/figcaption><\/figure>\n

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Important Information<\/strong><\/span><\/em><\/p>\n

The information on this website is general advice only. This means it does not take into account any person\u2019s particular investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the product.<\/em><\/p>\n

A Product Disclosure Statement for Raiz Invest and\/or Raiz Invest Super are available on the Raiz Invest website and App. A person must read and consider the Product Disclosure Statement in deciding whether, or not, to acquire and continue to hold interests in the product. The risks of investing in this product are fully set out in the Product Disclosure Statement and include the risks that would ordinarily apply to investing.<\/em><\/p>\n

The information may be based on assumptions or market conditions which change without notice. This could impact the accuracy of the information.<\/em><\/p>\n

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz Invest or Raiz Invest Super.<\/em><\/p>\n

Past return performance of the Raiz products should not be relied on for making a decision to invest in a Raiz product and is not a good predictor of future performance.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

New to investing or want to test your knowledge? Below are some helpful investing definitions on common words related to investing.\u00a0 It would be great if there were no risks associated with investing, but there are, and because of market movements and other risk the value of investments can go up and down. To learn […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[1],"tags":[],"yst_prominent_words":[744,733,580,98,581,577,245,233,289,727,742,313,97,82,117,166,125,239,3262,741]}