20 Financial Market terms you should know
Investment is a monetary asset that is purchase with the intention that it will provide income in the future. It is a means to create wealth over the long term. Some of the examples are deposits, mutual funds, and real estate.
2) Portfolio diversification
Portfolio diversification is an investment strategy that helps you manage your risk. Basically, it invests your money in a variety of investments. Portfolio diversification has a greater potential to get high-return in the long run. It also lowers the risk associated with each particular investment.
3) Financial Market
It is virtual or physical spaces that are dedicated to the purchase and sale of financial assets.
4) Debt Market
Bonds and Debentures are brought and sold in a debt market. Government and Companies entities issued these instruments.
5) Equity Market
Stocks of public limited companies are traded in the equity market. Here, you can carry out a variety of trades such as intraday transactions, delivery trades, Initial Public Offers (IPOs), and Follow on Public Offers (FPOs).
6) Money Market
Investment in Money Market is for a short period of less than one year. In a money market, Monetary assets like treasury bills, commercial papers, and certificates of deposits can be bought.
7) Capital Market
Assets with medium-term and long-term investment horizons are traded in the capital market. Capital markets are divide into primary markets and secondary markets.
8) Cash Market
Here, financial assets are sold for cash and for immediate delivery. Transactions are settled on a real-time basis.
9) Futures Market
Here, you may pay the money at the time of making your transaction, but the delivery of the asset happens at a later date.
10) Exchange-traded market
It is a centralized market that runs on standardized procedures. Transactions occur through an exchange. The exchange-traded market is used by well-established companies.
11) Over-the-counter market
It is a decentralized market where buyers and sellers can interact with one another and engage in the trade of customized products, as per their requirements. It is used by small companies.
Other terms such as
12) Stock exchange
14) Depository participant
16) Institutional investors
17) Retail investors
18) Hight Networth Individuals
19) Stock market
20) Clearance and settlement
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