Active investing / management

Active management (the opposite of passive management or index tracking) refers to the use of a living, breathing human being (or multiple human beings) to make investment decisions for a fund’s portfolio ...

Value investing

We all know people who tend to overreact. Did your mum really have to report you missing just because you didn't return her calls for a couple of days? Value investors use the market's overreactions to both good and bad news to their advantage ...

Volatility

Volatility is as simple as it sounds. It's a measure of how wildly the price of an investment fluctuates. A high volatility investment is considered more risky. There's greater chance of you facing a loss or a lower return than you'd hoped for if you need to sell during one of those many low points ...

Underweight / overweight

We all have an ideal weight range determined by our body mass index. Turns out the same is true for our investment portfolios.

A portfolio is overweight if it contains an excess amount of a single security. If the portfolio lacks a sufficient amount of a security (mainly shares or bonds), it is considered underweight ...

Fixed income

The industry calls it fixed income; the rest of us say bonds. Bonds are effectively loans made by you, the investor, to a company or government. They promise to repay the exact investment back after an agreed period - five or ten years' time is common ...

Frontier markets

Also known as "pre-emerging markets", frontier markets are countries with investable, but less developed (read: more volatile), stock markets. Due to political instability, substandard financial reporting, and other inadequacies common in these markets, they are particularly attractive to investors looking for a high risk, high reward option to fuel their next adrenaline rush ...

Fund of funds

It would be great if this was the collective name for funds (you know, like murder of crows). It's not. A fund of funds is exactly what it says: a fund that invests in other funds. They are also known as multi-manager funds. Their primary goal is to spread your money more widely - not putting all your eggs in one basket - while (hopefully) backing the best active fund managers ...

Funds

The industry calls it fixed income; the rest of us say bonds. Bonds are effectively loans made by you, the investor, to a company or government. They promise to repay the exact investment back after an agreed period - five or ten years' time is common ...

Securities

Nearly every time you talk about securities, it will be about mainstream investments - shares and bonds. To get a little geekier, securities are actually any financial instrument that holds some type of monetary value and can be bought and sold ...