An asset is any form of investment that can generate future income. For example, if you buy a car and rent it out in exchange for money, then your car becomes an asset.

Asset Allocation

Asset allocation is the practice of diversifying your investments to reduce risk.


Asset prices can be referred to as a Bid or an Ask. The Bid represents the highest price a buyer is willing to pay for an asset, while the Ask is the lowest price at which a seller is willing to sell an asset.

Bull/Bear Market

An asset is in a Bull Market when its prices rise by about 20% over a consistent period. Conversely, an asset is in a Bear Market when its prices fall by about 20% over a consistent period.


A share refers to a unit of ownership in a company. It is one of the equal portions into which a company’s capital is divided.


A bond is a loan provided by a buyer (you) to the issuer of the bond (usually the government or a corporation). When you buy a bond, you provide the issuer with a loan that they will repay on a specific agreed date. In the meantime, the issuer pays you periodic interest until the loan is repaid.

Capital Gain or Loss

A capital investment is the total amount of money spent on an investment. A capital gain is the profit made on a capital investment. For example, if you invested Rs 100 in a wallet (capital investment) and then sold the wallet for Rs 150, you have made a capital gain of Rs 50. Similarly, if you sold the wallet for Rs 50, you incurred a capital loss of Rs 50 since you lost Rs 50 on your capital investment of Rs 100.


When someone buys shares of a company, that person becomes a shareholder. A company can then decide to reward their shareholders by sharing part of their profit with them. This shared profit is called a dividend, which can be given in cash (in proportion to one’s share) or in the form of additional shares in the company.


Interest is the money charged to borrow money or the profit made on an investment.

Compound Interest

Compound interest is the earning or owing of interest on your initial interest.


An index tracks the performance of a group of assets to measure the overall performance of a specific investment type or category. For example, the S&P 500 is an index of the 500 largest publicly traded companies in the USA.

Index Fund

An index fund is a fund that consists of a group of companies that track and mirror the performance of a certain index, like the S&P 500, by mimicking its composition.

Mutual Fund

A mutual fund is a pool of funds gathered from many investors, managed by professionals to invest in stocks, bonds, and other assets on behalf of the investors.


A portfolio consists of all the financial assets (cash, stocks, bonds, etc.) that an individual investor or fund owns.


The return is the profit or loss of an investment over a specific period of time.

Risk Tolerance

Risk tolerance refers to the degree of risk an investor is willing to take when making an investment.


Any type of financial instrument (cash, stocks, checks, bank loans, etc.) that can be traded is known as a security.


An IRA, or Individual Retirement Account, is a retirement account that offers long-term, tax-advantaged savings used by individuals with earned income to save for the future.


Margin refers to money borrowed from a broker to make an investment.

Market Capitalization

A company’s market capitalization refers to the cumulative value of all of the company’s shares held by all its shareholders.