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USA Jargon busting: what you really need to know
The investment industry is fond of jargon. Deciphering this alphabet soup of acronyms can give the impression that investing is complex and impenetrable
The investment industry is fond of jargon. Deciphering this alphabet soup of acronyms can give the impression that investing is complex and impenetrable. It may even deter people from making the best long-term decisions for their wealth. Much like flat-pack furniture, the clearer the instructions, the better the outcome.
1. Volatility
2. Diversification/asset allocation
3. Total return approach versus income only
4. Target return and time horizon
5. Benchmarks
Five you can comfortably ignore. But just in case you’d like to know...
1. EBITDA
2. Negative capital growth
3. Alpha and Beta
4. Operational leverage
5. WABUA and FAANGs
It is important not to be distracted by jargon or let it turn you off investment altogether. The alternative is to have a high weighting in cash, which may feel like the straightforward option, but will not protect against inflation and may see your portfolio lose money in real terms over time.
It is important to remember that investment does involve risk and the value of investments and the income from them can fall as well as rise and you may not receive back the original amount invested.
Nick Murphy, head of charities, Evelyn Partners
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Please remember investment involves risk. The value of investments and the income from them can fall as well as rise and investors may not receive back the original amount invested. Past performance is not a guide to future performance.
