Terms Related to Investment Management The following are some terms that are related to investment management:
Asset: An asset is, essentially, anything of monetary value that a person or a company owns. This could include stocks, bonds, and even property, like cars and houses.
Appreciation: Appreciation happens when an asset rises in value.
Common Stock: Common stock is an investment in a public company that grants the stockholder ownership rights in the business. Not all stockholders have an active role in the company, but they do get a share of the profits.
Depreciation: Depreciation happens when an asset lowers in value.
Dividend: A dividend is a share of the profit that is distributed to a holder of common stock or other type of security. Other securities, like a savings account with an interest rate, also provide a dividend to the account holder.
Equity: The term equity refers to a security that is essentially ownership of a part of a company, typically in the form of a stock.
Liquidity: Liquidity refers to how quickly and easily an asset can be changed into useable funds. Stocks and bonds, for instance, can usually be turned into cash faster than property like vehicles and r estate can be.
Principal: A principal is the original amount of an investment.
Securities: Securities are items of financial worth that are transferable, whether that transfer is to another holder or into useable funds. Stocks and company shares are common types of securities, but items issued by financial or government organizations, like bonds, are also considered to be securities.
Volatility: The volatility of a security is how much its value varies. For example, a stock that has a history of very high costs and very low costs is extremely volatile. This somewhat subjective detail is often used to help determine the risk associated with a particular investment.