Talking a foreign language?

Have you ever read a sentence and not completely understood what was being explained? Have you felt like someone was speaking to you in another language? This is all too common sometimes when dealing in the world of finance and commerce.

When first becoming involved with financial planning and stocks and shares it is a very alien world to enter into and some people don’t have a clue what some of the jargon is and find themselves spending hours of time researching what it is all about. Even those of you who are an ‘in depth’ spread betters have to look up the odd piece of terminology to satisfy your curiosity, but there is plenty of information out there, especially online, that can offer assistance, if required.

There is nothing worse than ‘guesswork’ and as a consequence of this you may get something dreadfully wrong in terms of understanding what you are entering into. Even the Terms and Conditions of some companies may overwhelm you but this can soon be rectified if you fully comprehend the terminology.

For example:

Yield spread
This is the difference in the rate of return of two different investments. If Bond 1 earns a return of 24% and Bond 2 is 20%, the yield spread would be four percentage points.

Capitulation
Terminology used in the stock markets, this the point when a flurry of panic selling invokes a bottoming out of prices.

These of course are only a couple of examples within an extensive range of others but you can very often find websites that will include a glossary of information to suit your needs.