Glossary of Investment Terms in Trading Stock: Phrases and Definitions

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The following is a list of terms and phrases, prefixed with the word “investment” essentially used in trading stock exchanges. By definition, investment is an asset held by an individual or a company for the creation of more money through the use of capital. An investor is the owner of a financial asset.

Investment Phrases in Trading the Stock Market

Investment Account Policy – A life insurance policy under which premiums are paid into an individual investment account to which interest is credited.

Investment Adviser/Advisor – Also called as portfolio manager, investment manager, money manager. A person or an organization that carries on a business of advising others about a portfolio’s investments.

Investment Analyst – Also called financial analyst. A professional at an investment firm who analyzes company financial statements and industry trends with an objective to recommending that the company’s securities be bought, sold, or avoided altogether.

Investment Bank – Financial intermediary who performs a variety of services, including aiding in the sale of securities, facilitating mergers and other corporate reorganizations, acting as broker to both individual and institutional clients, and trading for his or her own accounts.

Investment Climate – Factors such as economic, monetary, and other conditions that could affect the performance of investments.

Investment Club – A group of investors who combine their money into a larger pool, then invest collectively in stocks and bonds, making collective decisions as a group.

Investment Company – A company that invests the funds of investors in securities appropriate for their stated investment objectives in return for a management fee.

Investment Company Act of 1940 – Legislation that requires investment companies with the SEC and outlines standards by which they must operate

Investment Company Institute (ICI) – A national industry group of investment companies, founded in 1940.

Investment Consultant – An investment professional who is a part of the client’s investment strategy. His or her job is to actively monitor the client’s investments and continue to work with the client as goals change over time.

Investment Income – The revenue from a portfolio of invested assets.

Investment Interest Expense – Any amount of interest that is paid on loan proceeds used to purchase investments or securities. Investment interest expense includes margin interest used to leverage securities in a brokerage account and interest on a loan used to buy property held for investment. Investment interest expense is deductible within certain limitations.

Investment Management – The process of managing invested money or assets.

Investment Manager – The individual who manages a portfolio of investments.

Investment Objective – What an investor hopes to achieve by investing his funds. One investor may require income while another wants capital appreciation or growth. The investor’s objective governs the investment strategy.

Investment Philosophy – The style and general ideology of investment practiced by an investor.

Investment Policy Statement – The statement of objectives and constraints for an individual’s or organization’s investing approach.

Investment Risk – Uncertainty about the future gains or losses to be realized from an investment.

Investment Strategy – A strategy used by an investor when deciding how to allocated capital among several options including stocks, bonds, cash equivalents, commodities, and real estate.

The list of investment phrases used in the stock market is an indispensable resource for both the potential and seasoned investors.