Financial Services Glossary



Financial Services Terms for Financial Writers and Marketers



Glossary of financial services


Here is an alphabetized glossary of financial services and wealth management terms for managers, marketers, and content writers in the industry. This financial glossary can be useful investment insurance, and financial planning conversations.


Understanding and explaining financial terms is part of financial providers' fiduciary responsibility towards investors and plan participants. Accurately using financial terminology also supports clarity of communication and helps build trust for readers.​



  1. Accredited Investor - An individual or entity that meets certain income, net worth, or other criteria and is allowed to invest in certain assets not available to regular investors.
  2. Active Management - An investment strategy involving ongoing buying and selling actions by a fund manager to outperform a benchmark index.
  3. Alpha - The excess return of an investment relative to the return of a benchmark index.
  4. Alternative Investments - Investments in asset classes other than stocks, bonds, and cash such as hedge funds, private equity, real estate etc.
  5. Annual Percentage Rate (APR) - The cost of borrowing money or interest rate on a loan including fees and charges.
  6. Annuity - A financial product that provides fixed payments to an individual, primarily used as an income stream in retirement.
  7. Appreciation - The increase in the value of an asset or investment over time.
  8. Arbitrage - Profiting from price differences in two or more markets by simultaneously buying and selling identical assets.
  9. Asset - Anything with economic value owned by an individual or company.
  10. Asset Allocation - Dividing investments among different asset classes and markets to optimize risk and return.
  11. Asset Class - A category of financial assets such as stocks, bonds, real estate etc. with similar characteristics.
  12. Balance Sheet - A financial statement summarizing a company's assets, liabilities, and shareholders' equity.
  13. Bear Market - A market where securities prices are falling over a prolonged period.
  14. Beta - A measure of an asset's volatility and risk relative to a market benchmark.
  15. Blue Chip Stocks - Stocks of large established companies considered financially sound and with a long history of earnings and dividend growth.
  16. Bond - A debt security issued by a government or corporation paying fixed interest payments over time and repaying principal at maturity.
  17. Book Value - The value of an asset recorded on a company's balance sheet, representing its original cost less depreciation and amortization.
  18. Broker - An individual or firm that charges a fee to act as an intermediary between buyers and sellers of securities.
  19. Bull Market - A market where security prices are rising over a prolonged period.
  20. Buy and Hold - A passive investment strategy based on buying assets and holding them for a long period regardless of market fluctuations.
  21. Capital Gain - The profit earned from selling an asset at a higher price than its purchase price.
  22. Capitalization (Cap) - Market value of a company's outstanding shares calculated by multiplying total shares by current price per share.
  23. Certified Financial Planner (CFP) - A financial advisor credentialed by the Certified Financial Planner Board of Standards.
  24. Collateral - An asset pledged by a borrower to secure a loan that can be seized in case of default. Commission - The fee paid to a broker or agent for executing a trade or transactions.
  25. Commodity - A raw material or primary good that can be bought and sold such as metals, energy, agricultural products etc.
  26. Compound Interest - Interest calculated on initial principal and accumulated interest on prior periods. Results in exponential growth over time.
  27. Correlation - A statistical measure of how two assets or markets move in relation to each other.
  28. Credit - The ability of a borrower to access loans and buy on credit based on past repayment history and credit score.
  29. Credit Rating - An evaluation of a borrower's ability to repay debt determined by agencies like Standard & Poor's and Moody's.
  30. Credit Score - A number representing a person's creditworthiness based on their borrowing and repayment history.
  31. Cryptocurrency - Digital currency that uses cryptography to secure and verify transactions. Bitcoin is the first and most popular.
  32. Custodian - A financial institution responsible for safeguarding a customer's securities and assets.
  33. Day Trading - Buying and selling financial instruments within the same trading day to profit from short-term price movements.
  34. Debt - Money owed by one party to another, generally loans with defined repayment schedules and interest rates.
  35. Defined Benefit Plan - A retirement plan with specific payout amounts to employees guaranteed by employers.
  36. Defined Contribution Plan - A retirement plan where employees and employers contribute funds to investment accounts owned by employees.
  37. Depreciation - Decline in an asset's value over time due to use, age or obsolescence.
  38. Diversification - Reducing investment risk by purchasing a variety of assets from different markets and sectors.
  39. Dividend - A distribution of a portion of company's earnings to shareholders, usually cash payments.
  40. Dow Jones Industrial Average (DJIA) - Stock market index of 30 major US companies used as a benchmark and indicator of overall market performance.
  41. Equity - Stock or ownership interest in a company. Also, the difference between a company's assets and liabilities.
  42. Exchange Traded Fund (ETF) - A basket of securities like an index fund that trades on an exchange like stocks.
  43. Expense Ratio - The percentage of a mutual fund or ETFs assets used to pay for operating and management expenses.
  44. Financial Advisor - A professional who provides financial advice, guidance, and services to clients for a fee.
  45. Fixed Income - Investments with regular interest payments and defined principal repayments like bonds.
  46. Fund Manager - The individual responsible for making investment decisions in a mutual fund, ETF, hedge fund etc.
  47. Futures Contract - A derivatives contract obligating parties to buy or sell an asset at a predetermined future date and price.
  48. Gross Domestic Product (GDP) - Total monetary value of all finished goods and services produced within a country.
  49. Hedge Fund - An aggressively managed pooled investment fund pursuing returns using advanced strategies.
  50. Index Fund - A portfolio constructed to match or track the components and performance of a financial market index.
  51. Inflation - The rate at which the purchasing power and prices for goods and services increase over time.
  52. Initial Public Offering (IPO) - The first sale of stock by a private company transitioning into a publicly traded company.
  53. Interest - Payment from a borrower to a lender for use of borrowed assets, usually money.
  54. Investment Banking - Advisory services for mergers and acquisitions, underwriting new debt and equity offerings, etc.
  55. Investment Strategy - Guidelines used to determine optimal asset allocation and timing of purchases and sales to achieve financial goals.
  56. Junk Bond - A high-yield, risky bond with a credit rating below investment grade that offers higher returns.
  57. Liability - Money or debt owed by an individual or company.
  58. Liquidity - The degree to which an asset can be quickly bought or sold on the market without impacting its price.
  59. Management Fee - An annual fee charged to investors by funds or advisors for managing assets.
  60. Market Capitalization - The total market value of a company's outstanding shares calculated by shares outstanding times current price per share.
  61. Market Index - A statistical composite tracking performance of a specified group of stocks, bonds, or other assets.
  62. Money Market Fund - A low risk mutual fund that invests in short term debt like government securities and commercial paper.
  63. Mortgage - A debt instrument secured by real property used to finance real estate purchases.
  64. Municipal Bond - A debt security issued by a state, city, or local government to fund public projects and services.
  65. Mutual Fund - An investment vehicle comprised of funds from many investors and managed by an investment company.
  66. Net Asset Value (NAV) - The per share value of a fund's assets minus its liabilities used to value mutual funds and ETFs.
  67. Passive Management - An investing approach based on long term buy and hold strategies rather than active trading.
  68. Portfolio - The collection of all investments owned by an individual or institution.
  69. Preferred Stock - A stock that entitles shareholders to fixed dividend payments and priority over common stock shareholders.
  70. Price-to-Earnings Ratio (P/E) - The ratio of a company's share price to earnings per share, used as a valuation metric.
  71. Principal - The initial amount invested or the face value amount of a bond.
  72. Private Equity - Equity investments in companies not publicly traded on exchanges, usually involving an ownership stake.
  73. Profit Margin - A measure of profitability calculated by dividing net profits by net revenue.
  74. Prospectus - The legal document that provides details about an investment offering to the public.
  75. Real Estate Investment Trust (REIT) - A company that owns and operates income-producing real estate assets.
  76. Recession - A significant sustained decline in general economic activity characterized by decreased employment, retail sales, and manufacturing output.
  77. Registered Investment Advisor (RIA) - An individual or firm registered with the SEC that is fee-based and provides fiduciary investment advice.
  78. Return on Investment (ROI) - The percentage return or profit calculated by dividing net gains by total costs. A metric used to evaluate and compare the profitability of investments.


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