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Glossary

Glossary

The economic markets overflow with complicated terms. Get a quick overview on the most common terms investors use to navigate the markets. Discover the ins and outs of macroeconomics through terms like GDP, forex and more.

Glossary

Junk Bonds

What Is A Junk Bond? Junk bonds are debt securities issued by corporations with poor credit ratings, which means they yield more than investment-grade bonds because of their greater risk…

Glossary

Yield Spread

What Is Yield Spread? The yield spread is the difference in yield between two different bonds. Investors use the yield spread to measure the relative value of two different securities,…

Glossary

Annuities

What Are Annuities? An annuity is a contract in which an insurance company agrees to pay out a guaranteed sum of money to an investor, called the annuitant, for a…

Glossary

Haircut

What Is A Haircut? A haircut in finance has several meanings. It most commonly refers to the reduced value of a financial asset for purposes of calculating capital requirements, a…

Glossary

Discount Window

What Is A Discount Window? The discount window is the mechanism through which central banks lend short-term money to the commercial banks under their authority, both to provide liquidity to…

Glossary

Modern Monetary Theory

What Is Modern Monetary Theory? Modern monetary theory (MMT) is a school of economic thought that essentially posits that governments can run large budget deficits without much concern because they…

Glossary

CAPE Ratio

What Is The CAPE Ratio? The cyclically-adjusted price-to-earnings (CAPE) ratio is a variation on the standard price-to-earnings (PE) ratio that seeks to determine if stocks are in a bubble. While…

Glossary

Wall Of Worry

What Is The Wall Of Worry? The "wall of worry" refers to a tendency in financial markets for stocks to rise in the face of seemingly difficult or insurmountable problems.…

Glossary

Asset-Backed Security

What Is An Asset-Backed Security? Asset-backed securities (ABS) are fixed-income instruments similar to bonds that are collateralised by a pool of loans, the payments on which are channeled to the…

Glossary

Reserve Currency

What Is A Reserve Currency? A reserve currency is a currency that is widely accepted around the world as a method of payment between countries for goods and services. Reserve…

Glossary

Target Date Funds

What Is A Target Date Fund? A target date fund is a mutual fund designed for retirement that automatically rebalances the fund's assets as the investors in the fund draw…

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