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Investments management terms

Volatility is the word of the year when it comes to investments management news. Geopolitical tensions and inflationary fears have been rocking the stock market, and it looks like we’re in for quite a ride in the months ahead.

Here are 10 key terms related to the current investments management climate and what we’re expecting to hear more about in the next few months.

Bear Market

– a long period of stock prices falling or consistently 20 percent below a recent high. A Bear Market is usually associated with an economic downturn, or recession.

Bonds

  investments in a company or government in the form of an interest-paying loan over a set period of time. At the end of that period, a bond matures, and the investor receives the principal amount and final interest payment.

Bull Market

– a period of consistently rising share prices that lasts for months or years; the opposite of a Bear Market.

CPI

– Consumer Price Index; the measure of consumer-focused price changes for standard goods and services.

Capital growth

– increased value of money invested over time.

Defensive assets

– investments with fixed interest rates, plus cash-based investments that are not subject to market volatility.

ETF

an Exchange Traded Fund is a type of pooled investment security that operates much like a mutual fund but trades on a stock exchange. ETFs will typically track an index, sector, commodity, or a wide range of other assets.

Growth investing

– a strategy focused on the growth potential of shares to maximize profits.

Index

– a group of shares specific to a certain industry sector or asset type, used to provide a standard by which the performance of a fund is measured.

P/E ratio

– measures the value of a publicly traded company and its potential for future growth, in the eyes of investors; calculated by dividing the current price of one share by its earnings.

These 10 terms are just a window into understanding all of the rapidly-changing investments management news stories you’re seeing now, and will see in the coming months. Learn more financial terms – or look them up as you need them – by using this searchable glossary of stock market terms from NASDAQ.

What investments management news should I worry about?

At Good Life, we work hard to create investment strategies that account for each client’s specific risk tolerance. We know you still worry about current market fluctuations that are affecting your portfolio, so we want to put your mind at ease.

Good Life Asset Strategies is a fee-only fiduciary, meaning we do what’s in our clients’ best interests at every turn. We keep our investors apprised of all market changes of interest to them, with the knowledge that their investment portfolios are more proactive than reactive. We help our high-net-worth clients plan for the long-term, rather than changing their strategies based on near-term (1 to 3 months out) market projections.

These days, the best defense against the bear market is a solid investments management offense. Anytime you have questions about your current investments, give us a call. We want to hear from you!

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