Wealth terms, explained simply
No jargon left behind — clear definitions for the words that matter.
A
Asset allocation
How your money is split across investment types like stocks, bonds and cash to balance risk and return.
B
Bear market
A prolonged period when prices fall and pessimism takes hold.
Bull market
A stretch of rising prices and broad investor optimism.
C
Compound interest
Earning returns on both your original money and the returns it has already generated.
D
Diversification
Spreading investments around so no single one can sink your whole plan.
Dividend
A share of a company's profits paid out to shareholders.
E
ETF
An exchange-traded fund — a basket of assets you can buy and sell like a single stock.
I
Index fund
A fund that tracks a market index, offering broad exposure at low cost.
L
Liquidity
How quickly an asset can be turned into cash without losing value.
N
Net worth
Everything you own minus everything you owe.
P
Portfolio
The full collection of investments you hold.
R
Rebalancing
Adjusting your holdings back to your target mix as markets move.
Risk tolerance
How much ups-and-downs you can comfortably handle on the way to your goals.
V
Volatility
How sharply an investment's value swings up and down over time.
Y
Yield
The income an investment produces, shown as a percentage of its price.
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