The terms in the investment market are explained as follows:
Asset: An object or right that can bring economic benefits. In the investment market, assets can be divided into physical assets and financial assets. Physical assets refer to assets that can be used or consumed directly, such as land, houses, machinery and equipment, etc. Financial assets refer to assets acquired through financial transactions, such as **, bonds, derivatives, etc.
Investment: refers to the act of investing funds in a project or enterprise in order to obtain profits. Investments can be divided into direct and indirect investments. Direct investment refers to the direct investment of funds by investors in a certain project or business, such as setting up a business, purchasing**, etc. Indirect investment refers to the fact that investors hand over funds to professional institutions for investment, such as purchases**, trusts, etc.
Investment risk: refers to the possible loss in the course of investment. Investment risk can be divided into systematic risk and unsystematic risk. Systemic risk refers to risks that have an impact on all investors, such as economic recession, political instability, etc. Unsystematic risk refers to the risk that only has an impact on a specific investor or a specific project, such as technology risk, management risk, etc.
Investment income: refers to the income obtained in the course of investment. Investment income can be divided into cash gains and capital gains. Cash proceeds refer to the cash flows obtained during the investment process, such as dividends, interest, etc. Capital gains refer to the income from investing assets***.
Return on Investment: Refers to the ratio of investment income to investment cost. ROI can be divided into simple rate of return and compound rate of return. The simple rate of return refers to the ratio of investment income to investment cost over a certain period of time. The compound rate of return refers to the ratio of investment income accumulated to investment costs over a certain period of time.
Portfolio: Refers to the combination of multiple investment assets held by an investor. Portfolios can be constructed based on investment objectives, risk tolerance, and other factors.
Investment strategy: refers to the principles and methods adopted by investors in the investment process. Investment strategies can be divided into value investment, growth investment, speculative investment, etc.
Here are some other terms commonly used in the investment market:
*: Refers to the certificate of ownership issued by a joint-stock company. **The holder is the owner of the company and has the right to dividends and voting rights of the company.
Bond: refers to a debt certificate issued by the debtor to the creditor. The bondholder is a creditor and has the right of the debtor to repay the principal and interest on time.
Derivatives: refers to financial instruments derived from other financial assets. Derivatives can be used to hedge risk, speculate, or arbitrage.
*: refers to a financial contract that is bought and sold at an agreed ** and quantity on a specific date in the future. Can be used to hedge risk or speculate.
Option: refers to the right to buy and sell an asset at an agreed ** at a specific date in the future. Options can be used to hedge risk or speculate.
Index: Refers to statistical data that reflects the performance of a particular market or industry. Indices can be used to measure the overall performance of a market or industry.
*: A financial instrument in which investors pool their funds and entrust them to a professional institution for investment. It can be divided into bonds, currencies, etc.
Trust: refers to the legal act of the settlor entrusting its property to the trustee, and the trustee will manage and dispose of it according to the requirements of the settlor. Trusts can be divided into charitable trusts and business trusts.
The investment market is a complex and volatile market that requires investors to have a certain amount of expertise and experience. Before investing, investors should be fully prepared and understand the basic knowledge and risks of the investment market.