• Quill Team

Investing Jargon

By Amanda Huang

J.P. Morgan, Goldman Sachs, Morgan Stanley, and other big names of the like all fall under the big umbrella of “investment companies.” When I first heard about these companies, I knew little to nothing about what their day-to-day responsibilities looked like. The functions of any investment company is extensive and probably hard to condense into a short blurb; but if you’re looking into a career in finance or investing, here’s a good list to familiarize yourself with first:


Stock pitch: summary of an investment idea or opportunity

Assets: anything tangible or intangible that is held by a company to produce positive economic value

Capital: financial assets, such as funds held in deposit accounts, as well as tangible equipment or facilities used for the production or storage of manufactured goods (does not include items used or consumed during the manufacturing process)

Equity: the value of the shares issued by a company

Common stock: a share representing ownership in a legally formed corporation

Fixed dividend: dividend returned to the holder each year, regardless of the company’s performance

Bond: a fixed income investment in which an investor loans money to a corporation or the government, which borrows the fund for a set period of time at an interest rate

Maturity date: the bond issuer promises to repay the principal loan amount by the maturity date

Preferred stock: a class of ownership in a corporation that has a higher claim on its assets and earnings than common stock; this kind of stock entitles the holder to a fixed dividend

Mutual fund: investors buy shares or units in a trust and the money is invested by a professional portfolio manager. The fund holds in individual stocks with the investors in the mutual fund receiving a report every year, detailing investments owned, income generated, etc.

Exchanged traded funds: mutual funds that trade throughout the day on stock exchanges as if they were stocks

Hedge funds: a partnership created between investors that uses high-risk methods such as investing with borrowed money, in hopes of realizing large capital gains

Trust funds: a fund comprised of a variety of assets established to provide financial security to an individual or a corporation; offers tremendous asset protection benefits

REIT(s) aka real estatement investment trusts: some investors buy real estate through REITs which trade as if they were stocks and have special tax treatment

Asset allocation: an approach to managing capital that sets parameters for different asset classes: equities(ownership/stocks), fixed-income(bonds), real estate, cash, or commodities

Investment mandate: a set of guidelines used to manage a specific portfolio or pool of capital

If this was helpful, look out for more business jargon pieces!

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