learn
Investing

Investing for Beginners: Terms to Know

Investing

Mins Read 3

img

When you're just starting out, investing can seem as intimidating as going skydiving without a parachute. While there is a lot of jargon to get past, you can get familiar with financial terms.

Here are some fundamental investing terms that are useful to know whether you're a beginner or seasoned investor.

Investing account terms to have on hand

  • Broker: Brokers allow you to purchase and sell investments on the investor's behalf, for a fee. 

  • Brokerage account: A licensed broker or brokerage firm offers a brokerage account, allowing investors to deposit funds and place investment orders.

  • Money market: A money market account is an interest-bearing account that pays a higher interest rate than a traditional bank savings account using the federal interest rate.

  • 401k: A type of retirement plan offered to employees by employers, which usually allows employees to invest their money the way they want. Self-employed people use an IRA.

Terms for investment structures

  • Mutual fund: Mutual funds are pooled portfolios in which an asset manager holds money to purchase stocks and bonds.

  • Index fund: An index fund allows an individual to track an index, such as the S&P 500. They work similarly to mutual funds.

  • ETF: Exchange-traded funds are similar to mutual funds, and can hold baskets of assets like stocks, commodities, or bonds. They trade shares on stock exchanges.

Financial terms to know about individual stocks

  • Expense ratio: The expense ratio reflects how much of a fund's assets is used on administrative and operating expenses.

  • Earnings per share: For dividend stocks, earnings per share is a company's net profit divided by its outstanding common stock shares. This number indicates the company's profitability to investors. 

  • Prospectus: A prospectus is a formal document filed with the Securities & Exchange Commission (SEC) that provides details about a public investment offering of stocks, bonds, or mutual funds. The SEC is similar to the Capital Market Authority in Saudi Arabia or the Dubai Financial Services Authority in the UAE.

Investing terms around going public

  • IPO: Also known as the initial public offering, where a private company can go public by opening the sale of its stocks to the general public.

  • SPAC: A special purpose acquisition company is a company formed for the main purpose of raising investment funds through an IPO. It's a shell company that takes a private company public. 

  • Direct listing: A company will sell existing shares instead of offering new ones for purchase, and will go public without the help of an underwriter.

Dissecting financial terms so you can become a better investor

There's a wealth of information around investing. With practice, you can learn the terminology and do your research to ensure that you're investing in the right stocks, funds, and other securities. Stay on top of the latest financial news and make sure to protect your return on investment. 

Check out Raseed's fractional investing and dip your toes into the US market with confidence. 

Never miss a thing!

news and markets updates

* Terms apply

Raseed Invest Limited © 2021 - All Rights Reserved.

Raseed Invest Limited (“Raseed”) registered in the Dubai International Financial Centre (“DIFC”) and is regulated by the Dubai Financial Services Authority (“DFSA”) to conduct financial services “Arranging Deals in Investments” with a 'Retail' endorsement. Raseed does not provide any trading or investment advice and shall not be responsible for any loss arising from any investment based on any general information provided by Raseed or as may be available on Raseed’s website and other web-based services (collectively, the “Website Services). Raseed does not warrant that the information is accurate, reliable or complete or that the supply will be without interruptions. Any third party information provided through does not reflect the views of Raseed.

The content of the Website Services provided by Raseed is only intended to provide you with general information and is neither an offer to sell nor a solicitation of an offer to purchase any security and may not be relied upon for investment purposes. Any commentaries, articles, daily news items, public and/or private chat publications, stock analysis and/or other information contained in the Website Services should not be considered investment advice.

Raseed shall not be liable for any delay, inaccuracy, error or omission of any kind in the information provided by Raseed and/or any third party information provider or for any resulting loss or damage you may suffer as a result of or in connection with the information supplied by Raseed and/or any third party information provider. In addition, Raseed shall have no liability for any losses arising from unauthorized access to information or any other misuse of information.

Any opinions, news, research, analysis, prices, or other information contained on our Website Services or emailed to you are provided as general market commentary, and do not constitute investment advice. Raseed will not accept liability for any loss or damage, including, without limitation, for any loss of profit which may arise directly or indirectly from use of or reliance on such information. Each decision as to whether an investment is appropriate or proper, is an independent decision by you. You agree that Raseed has no fiduciary duty to you and is not responsible for any liabilities, claims, damages, costs and expenses, including attorneys’ fees, incurred in connection with you following Raseed’s generic investment information. Raseed makes no representations as to whether a particular investment is appropriate or suitable for you.


View important disclosures