Financial education, no lectures.
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Teach Me

Jargon Hack! 17 Investing and Finance Terms, Simplified

April 01, 2017

  • If you’re new to investing, there can be a lot of unfamiliar terms and terminology
  • Learn the difference between a stock, bond, and ETF
  • Find out the difference between a dividend and a return
3 min read

If you’re new to investing, there can be a lot of terms and terminology that may be new and unfamiliar. Stash is here to help you get started and learn as you invest.

[Did you come here via theSkimm? Click here]

1. Stock/Share

Shareholders have shares of a company. And a company’s stock is broken down into shares. This means that if you’re a shareholder of a company, you own a portion of that company.

Check out: You’ve Got Shares! But What is a Share Anyway?

2. Bond

A bond is a loan, and you’re the lender. Bonds are debt instruments. Though that might bring to mind the guitars your college roommate sold to pay his tuition, they’re actually an essential part of the economy.

Check out: Friends with Bond-ifits: The Better Kind of FWB

3. & 4. Debt and Equity

When governments and corporations need to borrow money, they issue debt securities. Investors, like you, can buy them — usually in the form of bonds or bond funds. You’re lending them money, and they agree to pay it back to you, plus interest.

Equity or ‘stock’ represents an ownership interest in a company.

You may know that you can invest in debt and equity, but do you know the differences and similarities?

Learn more: Debt & Equity: What Every Smart Investor Needs to Know

5. Index

An index is a list of securities (security = an overarching term for various kinds of investments) used to measure a collective value or price. These securities can trade on a variety of exchanges.

To further hack this jargon with a relatable analogy, check out: What’s an Index? The New Investor’s Guide to the Playlists of Investing

6. ETF

ETF stands for Exchange-Traded Fund. An ETF is a basket of investments, bundled into a fund, that is traded on an exchange. How do these versatile funds compare with compilation albums, you ask?

Well, check out: Now That’s What I Call an Investment! ETFs Explained.

An ETF is a basket of investments, bundled into a fund, that is traded on an exchange.

7. Dividends

A dividend is a payment, usually a distribution of a company’s earnings, a divvying up, made to a company’s shareholders. Dividends are almost always paid out in cash, usually quarterly, aka four times a year.

Check out: At the Dividend of the Day You’re Another Share Richer

8. Return

Amount an investment has increased or decreased, represented as a percentage or dollar amount. Your return is how much money you’ve gained or lost on your investment.

When you invest with Stash you get a return through changes in price, dividend and interest payments, and capital gains distributions.

Check out: Return: An Investment Term Worth Coming Back To

9 & 10. Exposure and Holdings

Exposure is anytime you are financially exposed, both to downside risk and potential rewards. Holdings are the investments held by you.

Check out: Exposure and Holdings: Double the Jargon, Double the Fun!

11. Investment Risk

Investment risk is the uncertainty of your investment’s future returns. Risk is always a factor when you invest, and it is often juxtaposed with potential reward, and potential loss.

Check out: Investment Risk: What it Is and How to Manage It

12. Diversification

Diversification is putting your money in a variety of different investments that are not subject to the same risks and therefore are less likely to share the same fate. This is where the old adage, “Don’t put all your eggs in one basket,” comes into play.

Learn more: Diversification: How to Choose Investments When You Can’t Predict the Future

13. Volatility

This is a term for a measure of risk related to the price movement of financial securities including stocks. Volatility is a measure of risk, but risk isn’t always a dirty word when it comes to investing.

Check out: Let’s Talk Volatility: Sailing the Highs and Lows of the Investing Seas

14. Fiduciary

Not only is it fun to say, (come on, say it with me: fuh-doo-shee-air-ee), but it’s also a powerful concept that defines a relationship built on trust and duty. Fiduciaries (like Stash) are required to act in their client’s best interest.

Check out: What the Fiduciary? A Guide to Your New Favorite F Word

15. Dollar-Cost Averaging

Buying a little bit of an investment on a regular basis over time. All this technique requires is patience and perseverance.

Check out: Jargon Hack: Dollar-Cost Averaging

16. Market Capitalization

Market Capitalization or “market cap” can be defined as the total equity market value of a company, expressed in millions of dollars.

Check Out: Market Capitalization: How to Compare Apples to Apples When Investing

17. Nonprofit

Curious about the difference between a charity, a private foundation, and a supporting organization?

Check out: Nonprofits: What You Need to Know in Under 6 Minutes

By Clare Edgerton
Clare is an editorial producer and writer for Stash.

Next for you
Now That’s What I Call an Investment! ETFs Explained
Explore more articlesChoose a topic to learn more about
politics pop culture budgeting social media Technology

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit