Understanding Investment: The Basics

in Investment
If you are new to the world of investing, it can all seem a bit confusing at first. You may read and hear terms that you've never heard of before, but this doesn't mean you should shy away from getting involved. Having a strong relationship with your financial adviser is a good place to start, but in order to begin your voyage of discovery, it might be sensible to read up on some key terms.
Luckily, we've done some of the legwork for you and have found some of the most basic top terms that come up in regards to saving investments. Read on to find out more...
Financial adviser: If you are already feeling baffled, it makes sense to explain what a financial adviser is. In short, financial advisers are the people who can offer you advice and sell you products on behalf of a range of insurance and investment companies. Their job is to provide you with advice about all aspects of finance.

Investment: A financial adviser might help you to think about investments that you wish to make. Investments can take many forms, but their primary purpose is for the production of income and/or capital gains for its owner.

Capital: Capital is simply the amount that you choose to invest in any type of savings or investment product.

Risk: Like investments can take many forms, risk can too. In simple terms, risk is the variability of returns. Investments that have a greater risk go hand-in-hand with a higher yield; after all, investors wouldn't be attracted to them if they weren't going to get a high enough return.
Stock market: Risk can often be seen in the stock market. The stock market (such as the London Stock Exchange) is a place where shares or other securities are bought and sold. Share prices in the stock market can fluctuate for a number of reasons, including the current economic conditions.
Security: When you invest into the financial markets, you receive a paper right to the (generally tradable) asset. The term "security" includes Bills of Exchange, bonds, share certificates, and other financial market papers.

Portfolio: Once you begin to accumulate a number of investments, you are said to have a portfolio. You might have a mix of different investment types, such as bonds, property, shares and cash, but you may also just have a single asset class.Skandia have a range of Saving Investments available for you when you have money to invest. Secure your future with Skandia.
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Gareth Hoyle has 1 articles online

Skandia have a range of Saving Investments available for you when you have money to invest. Secure your future with Skandia.

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Understanding Investment: The Basics

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This article was published on 2010/12/22