For a novice, it can be intimidating to invest money. There's the anxiety that comes with taking risks and knowing you may not get all of your money back. But arguably, what's even more intimidating is the investing jargon. There are a lot of buzzwords financial advisors and veteran investors use, like expense ratio and asset allocation, that are important for average investors to understand, yet the language can be a barrier.
So if you'd like to invest but feel like you're visiting another country where your money may not be welcome, maybe you just need to learn the language first. This isn't a comprehensive list by any means, but understanding these terms may make you feel more confident about investing.
Asset allocation. This is just a fancy phrase for your investment strategy. There are three general categories where you're going to put your money: cash, bonds and stocks, says Kemberley Washington, an accounting professor at Dillard University in New Orleans and a certified public accountant. "Cash," she says, "is the least risky and would provide the least amount of return … Bonds are generally riskier than cash but less risky than stocks."