accrued interest – The interest accumulated since the last interest payment date.

amortization – Gradually eliminating a debt by money put aside on a regular basis.

assets – Everything a company or a person owns, or is owed.

balance sheet – A financial statement showing what a company owns, and what it owes.

basis point – Used to describe the difference in bond yields. One basis point equals one-hundredth of a percentage point.

bear market – A market in which prices are declining. When prices are rising, the term ‘Bull Market’ is used. To help keep them straight, some people think of the phrase, “Bear down and bull ahead”.

bonds – A certificate of debt in which the issuer pays the holder interest, and repays the loan upon maturity. Bonds can be issued by governments or corporations.

broker – A securities firm, or investment advisor who acts as an agent between buyer and seller.

bull market – A market in which prices are rising. See also “Bear Market”. capital gain or loss – Profit or loss resulting from the sale of certain assets. May have tax implications, depending on the legislation in your jurisdiction.

common stock – Securities which represent ownership in a company and carry voting privileges.

compound interest – Interest earned on an investment at periodic intervals and added to the original amount. Future interest payments are then calculated on the increased total of the investment – in effect, interest paid on interest.

corporation – A business organization which has a legal identity separate from its owners. The owners are shareholders.

deferred income taxes – Income tax obligations incurred in the current time frame, but to be paid at a future date.

dividends – Money paid to shareholders in proportion to the number of shares they own. Dividends are usually a fixed amount with Preferred Shares. They may fluctuate, or not be paid, with Common Shares.

estate planning – Planning the transfer of all personal assets to your beneficiaries upon your death.

fixed deposit – A fixed-income debt security, usually issued by banks. A Fixed Deposit is like loaning the bank your money. In return, they pay you interest.

interest – Money charged by a lender for the use of his or her money.

life annuity – A contract which guarantees the planholder a regular income in exchange for a specified amount of money.

maturity – The date on which a loan or bond comes due and is to be paid off.

money market – That part of the market in which short-term financial obligations are bought and sold.

mortgage – A contract in which certain property is pledged as security for a loan.

mutual funds – Investment funds which are made up of other investments and often defined by themes. For example, a “Global” fund would invest in companies around the world, while a “Property” fund would invest primarily in real estate.

net worth – Total assets minus total liabilities. Equal to shareholders’ equity.

portfolio – All of the investments of an individual or company.

prime rate – The interest that banks charge to their most credit-worthy customers.

prospectus – A legal document which describes the securities being offered for sale.

return – The income earned or capital gain made on an investment.

securities – Investment products, including stocks, bonds, futures contracts, options and notes.

stock exchange – An organized marketplace where buyers and sellers come together to trade stocks. The New York Stock Exchange (NYSE) is the most famous, but there are stock exchanges all over the world.

tax shelter – An investment that offers tax savings in some form.

term life insurance – A policy that provides protection for a specific period of time (eg. 20 years). If you’re alive when the term ends, there is no payout. Usually the least expensive type of life insurance.

treasury note – A government Treasury Note, which is a short-term debt issue.

universal life insurance – A flexible policy, in which the cost of the premium, the savings value and the coverage can change as your needs change.

volatility – The rate of change in the price of a security over a given time.

whole life insurance – Combines life insurance with a savings plan. Premiums are fixed and the policy remains in force as long as you continue paying your premiums.

yield – The return on an investment, shown as a percentage.