Confused by those technical terms your financial adviser lobs relentlessly at you? Cut through the noise with this quick and dirty guide.

Equities These are also known as stocks, securities or shares. When an investor buys the equities of a company, he or she has ownership interest of the company after the company pays off its liabilities. Equities are considered the easiest way to invest in listed companies.

Shares A unit of ownership interest in a corporation or nancial asset.

Stocks A stock is a type of security that signies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.

Bonds A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental), which borrows the funds for a dened period of time at a variable or xed interest rate. Value investing comes from leveraging on the inverse relationship between bond prices and interest rates.

ETFs An ETF, or exchangetraded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund.

Fixed Deposits Also known as time deposits, these are a type of investment that will help you earn interest over a xed term. When you deposit money into such an account, you will not be allowed to withdraw from it until after it matures. Over this time, the money will earn interest. The interest rate on xed deposits is higher than the rates offered to traditional savings accounts.

Fixed Income This is a type of investing or budgeting style for which a periodic income is received at regular intervals and at reasonably predictable levels. Fixed-income investors are typically retired individuals who rely on their investments to provide a regular, stable stream of income. This strategy is often used to overcome the ination rate, and bonds are one of the most common xed-income securities under this category.

Dividends A dividend is a distribution of a portion of a company’s earnings to a class of its shareholders. When a dividend yield is high, it signies a higher income for investors. It means the company stocks that you have invested in pay out a high percentage of the value of a share. The higher the yield, the more money is earned during a dividend payout.

Market Capitalisation Market capitalisation refers to the total dollar market value of a company’s outstanding shares. This is a good measurement of the size of a company. Commonly referred to as “market cap”, it is calculated by multiplying a company’s shares outstanding by the current market price of one share.

Liquidity/Liquid Assets Liquidity means the ability to convert assets into cash, or the equivalent, by selling them on the open market. A liquid asset is cash on hand or an asset that can be readily converted to cash.

Market Risk This refers to the general risk in any kind of investment. Investors base their decisions on different factors – technical analysis, fundamental analysis, and assumptions. Some even base it on luck – which is also a kind of risk.

Credit Risk Companies are built not solely on the money of their owners but also the money of some lenders. In a sense, if you are investing in a company that has debt, you are also an owner of that debt. Credit risk is the possibility that the company could default on the debt, making you lose your money as an investor.

Healthy Cash Flow The company can pay out dividends even if there is a decrease in revenues and the assets exceed the liabilities.

Investment-linked Insurance Policies Investment-linked insurance policies are a mixture of what insurance policies and different investment vehicles can give you. Investing in an investment-linked insurance policy allows investors to buy investment units of their choice using the premiums they pay for their life insurance policy.