Here we explain some common financial terms. You may already understand and know how to use some of them. But to be certain you know how to use them accurately, read through the example sentences below.
Bear Market
A bear market is a long period of time when the price of shares is falling and a lot of people are selling them.
| A bear market followed the bombing of the World Trade Centre in New York. |
Bull Market
A bull market is a long period of time when the price of shares is rising and a lot of people are buying them.
| During the bull market of the late 90s, the London Footsie 100 almost doubled in value. |
Dividend
A dividend is (a part of) the profit of a company that is paid to the people who own shares in it, i.e. the shareholders.
| Dividends of US$0.4 per share will be sent to shareholders on March 31. |
Mutual Fund
A mutual fund is an investment fund that pools the money of many individuals who buy shares in the fund, and invests the pooled money in other investments. (also known as a unit trust in the United Kingdom)
| It was another good week for mutual fund investors as equity markets moved higher and came within striking distance of the 11,000-point mark. |
Portfolio
A portfolio (of investments) is a group of investments held by an investor. For example, a mix of stocks, bonds, mutual funds, real estate, gold, etc. all taken together would make up a portfolio of investments.
| Investment in real estate makes up the bulk of his investment portfolio, but he also has some considerable investment in gold. |
Return on Investment
The return on investment is the amount of profit earned from an investment. This is usually expressed as a percentage where the profit is divided by the amount of capital invested and multiplied by 100.
| After investing US$40,000 last year in a start-up company, we’ve already had a 47% return on investment. |