Some different words or phrases get used, but do they mean something different or are they all the same? We discuss a variety of financial phrases so you understand what it is you’re really dealing with.
Click on the timestamps below to jump to specific topics.
Let’s play a little game of what phrases Nathan says and just what that means. Does it really matter or is it all the same? Instead of getting lost in the jargon, today we highlight what these words and financial phrases mean.
Do you say tennis shoes, gym shoes, or sneakers? It might depend on how you were raised or where you’re from. In the financial world, are these all the same: a market crash, market correction, market pullback, market downturn, or bear market? The media may use them interchangeably, but Nathan clarifies the distinctions. All of them may make you worry about how your money is doing, but it’s important to keep a clear head. A bear market or market crash are the ones you’ll want to stay most aware of.
Fireflies and lightning bugs sound different but are actually the same. This is also true with junk bonds and high yield bonds. Nathan calls them junk bonds on purpose. Junk sounds like garbage and high yield sounds a lot better. In both cases, the risk is higher and the credit quality is lower.
Stocks and equities are the same thing, but people tend to use the word stock more. Fewer people know how the term equities applies to their portfolio. If you’re not familiar with a certain word though, make sure to ask your advisor to explain it so that you understand.
Are you working with a financial advisor or an investment advisor? There are different licenses that investment advisors have to get vs. a stock broker. This can get confusing as a client. Work with a financial advisor that is appropriate for you and your needs. Finally, which sounds better, a client or a customer? Nathan refers to the people he works with as clients, which is more focused on the relationship. Does your financial advisor have a relationship with you in order to have your best interests in mind?
Listen to the entire episode or skip ahead using the timestamps below.
[0:42] – Let’s play a game!
[2:10] – Tennis shoes, gym shoes, or sneakers?
[3:20] – Market crash, bear market, or market downturn?
[5:50] – Firefly vs. lightning bug?
[7:19] – Junk bonds vs. high yield bonds?
[9:31] – Stocks or equities?
[11:15] – Financial advisor or investment advisor?
[14:50] – Water fountain, drinking fountain, or bubbler?
[16:03] – Clients or customers?
A Point Of Wisdom:
The license that I have to get as an investment advisor, the securities license, is different for me vs. a stock broker.
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