Investing Flashcards
Liquidity
The degree to which an asset can be quickly bought or sold in the market without affecting the asset’s price.
Rate of Return
The annual income from an investment expressed as a percentage of the original investment.
Capital Growth/Capital Gain
Profit made on an investment or purchase of an asset, measured by the increase in its value over the cost price.
The higher the risk …
The greater the return
The lower the risk …
The lower the return
Shares
A share (or a stock) represents part ownership in a business.
Generally, the more profitable a business is, the higher the perceived value (or higher the cost) of that share.
Sharemarket
A marketplace where buyers and sellers come together to work out a price by biding for shares.
What are other names for shares
Equities, stocks
Share Fluctuations
Share value goes up when value of business goes up.
Share value goes down when value of business goes down.
Diversification
An investment strategy that lowers a portfolio’s risk to help achieve more stable returns.
This is done by investing your money across different asset classes such as shares, bonds, property, and private equity.
You can buy across different sectors, fund managers and product issuers.
Term Deposit
A cash investment held at a financial institution.
Money is invested for an agreed rate of interest over a fixed amount of time, or term.
Facilitate greater capital security and a set return.
Money can only be withdrawn at the end of the period - or earlier with a penalty attached.
Cryptocurrency
Crypto-assets (crypto, cryptocurrencies, coins or tokens) are digital assets that do not have a physical form. They may not be back by physical assets.
High risk - very volatile, often fluctuating by huge amounts within a short period.
