Appreciation
When the price or value of something goes up.
COMMON FINANCIAL TERMS, MADE SIMPLE
The Money Dictionary.
Money has its own language. Search or browse these plain-language definitions whenever you come across a term you do not know.
Search the glossary ↓
100 terms
APO
Additional Public Offer. When a publicly listed company creates additional shares for sale to the public in order to raise money.
Asset
Anything owned by a person or company that has value.
Balance Sheet
A financial statement showing a company’s assets and liabilities at a specific point in time. Assets equal liabilities plus equity.
BOJ
Bank of Jamaica, Jamaica’s central bank. It sets policies such as inflation targets and interest rates and regulates financial companies.
Bond
A loan made by an investor to a corporation or government, typically with a fixed interest rate and repayment period.
Book Value
The net value of a company’s assets after its liabilities are subtracted.
Broker / Brokerage Firm
A licensed financial institution that trades or invests on your behalf.
Bubble
An unrealistically good market situation that is unlikely to last.
Capital
Money being put to work for productive or investment purposes.
Capital Gains / Capital Appreciation
The increase in the value of your capital, such as the difference when a stock rises above the price you paid.
CariCRIS
Caribbean credit ratings agency.
CD / Certificate of Deposit
A savings plan that generally pays more interest than regular savings in exchange for keeping your money deposited for a fixed period.
Compound Interest
Interest that is added to the principal so future interest is calculated on a new, larger balance.
Contrarian Investing
A strategy in which an investor does the opposite of what most people in the market are doing.
Coupon Rate
The interest rate.
Cross-listed
A stock listed on more than one stock market.
Current Assets
Short-term assets such as receivables, inventory, investments and cash.
Debt Exchange
When a borrower asks investors to exchange debt instruments for new ones, usually with lower interest rates and longer maturity dates.
Depreciation
When the price or value of something goes down.
Devaluation
A long-term loss in a currency’s value relative to other currencies.
Dilution
When shares are worth less because new shares have been created.
Dividend
Your share of a company’s profits. Companies are not obligated to pay dividends.
Dollar Cost Averaging
Investing the same amount at regular intervals regardless of price, with the goal of reducing the average cost per share over time.
The Dow
The Dow Jones Industrial Average, an index tracking 30 prominent US-listed companies.
Earnings Per Share (EPS)
A measure of profitability showing how much net income a company makes for each outstanding share.
Equity
The value of your ownership in an asset, property or business. Equity can also mean a unit of stock.
Equities
Another word for stocks.
ETF
Exchange Traded Fund. A fund containing several securities that can be bought and sold like an individual stock.
Eurobond
A debt instrument denominated in a currency other than the home currency of the country or market where it is issued.
Face Value
The original price of a bond and the amount the issuer agrees to repay at maturity.
Federal Reserve / The Fed
The central bank of the United States.
Financial Statements
The balance sheet, profit and loss statement, and cash flow statement prepared by a company to explain its financial position.
Fixed Assets
Physical assets such as property, plants, equipment and vehicles.
Fixed Rate
An interest rate that stays the same for the duration of a loan.
Fixed Exchange Rate
A policy that pegs a currency’s value to another currency.
Floating Exchange Rate
A policy that allows a currency’s value to change based on supply and demand.
Forex / Forex Trading
Buying and selling currencies to try to profit from changes in their relative values.
Future
A contract obligating parties to buy or sell an asset on a future date at a specified price.
Goodwill
The value a company’s customers place on the company.
Government Paper
Debt issued by a government, such as treasury bills, treasury bonds, notes and certificates of deposit.
Growth Investing
A strategy focused on companies with high earnings and capital-appreciation potential.
Hedge
A strategy used to offset potential losses in another area.
Hedge Fund
A group of private investors who pool money in an attempt to earn above-average returns, usually with high risk and high entry requirements.
High Yield Savings
A savings account that pays more interest than a regular savings account.
Impact Investing
Investing in companies that seek positive environmental or social impact as well as profit.
Income Investing
A strategy focused on generating regular income from dividend stocks, preference shares or bonds.
Index
A measure of the performance of a basket of stocks.
Index Fund
A portfolio of stocks or bonds designed to mimic a particular index.
Inflation
The increase in the cost of goods and services over time.
Intangible Asset
An asset you cannot see or touch, such as goodwill or intellectual property.
Investment Account
An account at a financial institution that lets you invest in instruments such as stocks and bonds.
IPO
Initial Public Offering. The first time a company offers shares for sale to the public.
JCSD
Jamaica Central Securities Depository, which provides depository and settlement services for securities traded on the Jamaica Stock Exchange.
JSE
Jamaica Stock Exchange.
JTraderPro
A Jamaica Stock Exchange platform that allows investors to buy or sell stocks online.
Junior Market
A Jamaica Stock Exchange market created to help eligible small and medium enterprises raise capital and grow.
Leverage
Borrowing funds to buy an investment.
Liability
Money that a person or company owes.
Liquidity
A measure of how easily an asset can be sold and turned into cash.
Listed Company
A company listed on a stock exchange; also called a publicly traded company.
Market Capitalization
The total value of all the shares of a company.
Market Value
The amount an asset can sell for on the open market; for a company, its value based on all outstanding shares.
Maturity
The end of the term of a bond or preference share, when the issuer repays the loan in full.
Mutual Fund / Unit Trust
A collection of stocks, bonds and other securities managed by a professional fund manager.
NASDAQ
A major electronic stock exchange based in New York.
Net Asset Value (NAV)
The value of an investment fund after subtracting its liabilities from its assets.
NYSE
The New York Stock Exchange.
Ordinary / Common Shares
A fraction of ownership in a company that generally carries voting rights but no guaranteed dividend.
Oversubscribed
When investors seek to buy more shares than a company is offering.
Passive Investing
A strategy that typically uses funds designed to track a market index.
Payables
Money a company has not yet paid suppliers for goods or services already received.
Price-to-Book Ratio (P/B)
A comparison of a company’s market value with the book value on its balance sheet.
Price-to-Earnings Ratio (P/E)
A company’s share price divided by its earnings per share.
Policy Rate
The rate at which a central bank lends to financial institutions.
Portfolio
A collection of investments.
Preference Shares
Shares that receive preference for dividends and typically have a fixed dividend.
Prospectus
A document in which a company outlines an investment offer in detail.
Receivables
Money a company has not yet collected from clients for goods or services already supplied.
Recession
Two consecutive quarters of negative economic growth.
REIT
Real Estate Investment Trust. A company that owns income-producing properties.
Repurchase Agreement / Repo
Short-term borrowing in which a dealer sells a government security and agrees to buy it back at a higher price.
Reserves
Cash a company has saved for future use.
Return on Equity (ROE)
A measure of financial performance calculated by dividing net income by shareholders’ equity.
Rights Issue
An offer allowing existing shareholders to buy additional shares, usually at a discount.
S&P 500
An index tracking 500 of the largest companies listed on US stock markets.
Securities
Tradable financial instruments such as stocks and bonds.
Share Buyback
When a company buys some or all of its shares back from the public.
Short Selling
An investment strategy designed to profit when a stock’s price falls.
SME
Small and medium enterprise or business.
Stock / Share
A fraction of ownership in a company.
Stock Exchange / Stock Market
A marketplace where company shares are traded between buyers and sellers.
Stock Split
When a company divides shares into more, lower-priced shares without changing its overall market value.
Treasury Bill
Short-term government debt, usually for no more than one year.
Treasury Bond
Long-term debt issued by a government.
Value Investing
Choosing stocks trading below their estimated intrinsic or book value.
Variable Rate
An interest rate that can change during the term of a loan.
Volume
The number of shares traded on a stock market.
Volume Leader
The stock with the highest trading volume.
Yield
For bonds, the interest earned plus any profit or loss from selling before maturity.
KEEP LEARNING
Start Investing →Now put the words to work.
Return to the beginner roadmap and take your next informed step.