Learn: Year 9 - Commerce - Investing

assets

something of value, e.g. property, house, shares

bear market

is a financial market in which share prices are falling or are expected to fall.

blue chip shares

very safe and secure shares

bull market

is a financial market in which share prices are rising or are expected to rise.

Capital Gains Tax

a tax on the profits arising from the increased value of assets such as shares or property

cash and fixed interest accounts

are often referred to as 'income producing' investments as you can use cash or open an account with a fixed interest rate to reduce risk. They also offer the potential for capital growth.

chaser

an investor who moves their money from one type of asset to the next, depending on which has the highest return

debenture

a document issued by a firm when you lend it a sum of money

diversifying

spending your money across different investment types in order to spread your risk

defence assets

provides lower rate of return but with lower risk

dividend

part of a firms profit that is divided among shareholders

ethical

acceptable to society in current standards

fixed interest rate

interest rate that remains the same for the period of the loan

growth assests

generally provides a higher return over longer period. However the prices are volatile and there is high risk involved

income and expenditure account

a record of income earned and money pent during the previous week

investment

putting money into something in order to make a profit. Individuals, governments and business all carry out investment

investment portfolio

all the investments an individual has

negative gearing

is a form of financial leverage whereby the income gained from the investment is less than the repayments on the loan

managed fund

a pool of money that comes from people who have similar investment goals. It is invested by a fund manager in assets such as shares or property

positive screening

choosing to invest in particular companies because they are seen as ethical

negative screening

choosing not to invest in particular companies because they can be seen as unethical

rate of return

the profit you receive on your investment as a percentage of the original investment

share

a part ownership of a public company

stockbroker

individual or firm that specialises in buying and selling shares

superannuation

a way of saving so an employee has some money in retirement

superannuation fund

a managed fund designed specifically to produce benefits when you retire

truth in lending

it refers to the idea that the real or total cost of borrowing money should be readily available to the investor

variable interest rate

rate that moves up or down depending on market forces

unsecured note

similar to a debenture except the holders of these are one of the last to be repaid if a firm is liquidated