Introduction

Planning to apply for a loan but confused by the myriad of banking jargon? You're not alone. Many people struggle to understand loan terms and the multitude of acronyms used by bankers and mortgage brokers.

Although you may seek advice from your local bank or mortgage broker, having a basic understanding of these terms will ensure increased confidence before signing on the dotted line.

Introduction

Investors who pay attention to the finance segment of the daily news may gaze in awe at the performance of the US share market over recent years. Even taking the more recent volatility into account, the Dow Jones Industrial Average has displayed a pattern of remarkable growth since its low point of 15,973 in February 2016. Meanwhile, the Australian All Ordinaries Index has yet to return to the height it enjoyed before the Global Financial Crisis at 6779.1 points.

This begs two questions: what are these indices? And what do their movements tell us about our investments?

Introduction

I’m the first to admit I’m no expert when it comes to horse racing, so hopefully you’ll forgive my ignorance. During my daily read of the major newspapers, I came across this headline in a major Australian paper:

“Trailblazer equals Phar Lap’s winning streak with triumph at Flemington.”

Wow! I thought. After 80 years, the mighty Phar Lap has been equalled!

Phar Lap’s legend has been passed through every Australian generation. According to Melbourne Museum, his exhibit continues to be its most popular. Intrigued, I read the article.

Only then did I discover that Phar Lap’s record of 14 consecutive wins has been beaten many times – Trailblazer being the most recent in a string of successful horses, including the famous Black Caviar with 25 wins.

That newspaper headline cunningly grabbed my attention, yet having read it, I felt betrayed somehow… even foolish.

It reminded me of an urgent call I’d received recently from a client. Brett is one of those guys you speak to a couple of times each year to review his portfolio – until one day a couple of months back.

Brett had seen this headline on a national news site:

Introduction

Jargon in any industry often confuses and confounds those who do not deal with it every day. Think about your computer. IT specialists seem to speak a different language. But investing shouldn’t be a minefield of gobbledygook that stops you understanding what your money is doing. Here we’ve taken some of the more commonly used financial terms and explained them in simple, everyday language.