Dave Fishwick Outlook Jul 13 Glossary

Term Definition
Asset Anything having commercial or exchange value that is owned by a business, institution or individual.
Bond A loan, usually taken out by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the loan is repaid.
Credit The borrowing capacity of an individual, company or government. More narrowly, the term is often used as a synonym for corporate bonds.
Debt An amount of money borrowed, and therefore owed, by one party to another.
Emerging economy/market Economies in the process of rapid growth and increasing industrialisation. Investments in emerging markets are generally considered to be riskier than those in developed markets.
Equities Shares of ownership in a company.
Inflation The rate of increase in the cost of living. Inflation is usually quoted as an annual percentage, comparing the average price this month with the same month a year earlier. There are two inflation indices in the UK – the Retail Prices Index (RPI) and the Consumer Prices Index (CPI).
Macro/Macroeconomic Refers to the performance and behaviour of an economy at the regional or national level. Macroeconomic factors such as economic output, unemployment, inflation and investment are key indicators of economic performance. Sometimes abbreviated to 'macro'.
Monetary policy A central bank's regulation of money in circulation and interest rates.
Quantitative Easing Often perceived as printing money, quantitative easing is a monetary policy tool used to stimulate money supply within the economy by easing pressure on banks and enhancing their liquidity. The Bank of Japan used quantitative easing in 2001 in an attempt to fight deflation.
Risk The chance that an investment's  return will be different to what is expected. Risk includes the possibility of losing some or all of the original investment.
The degree to which a given security, fund, or index rapidly changes. It is calculated as the degree of deviation from the norm for that type of investment over a given time period. The higher the volatility, the riskier the security tends to be.
Yield (equity) Refers to the dividends received by a holder of company shares and is usually expressed annually as a percentage based on the investment's cost, its current market value or face value.  Dividends represent a share in the profits of the company and are paid out to a company’s shareholders at set times of the year.