A Quick Lesson In Wall Street Lingo

Posted on January 11, 2007 // 9 Comments

It can be tough watching CNBC and reading stock market articles without knowing the proper terms. Here are some helpful pointers:

Profit-taking: All-purpose explanation for why the market went down.
Correction: A major market crash made to sound like a minor mistake.
Momentum investor: Buyer of stuff that’s already gone up.
Value investor: Buyer of stuff that looks like it’ll never go up.
Broker: What you’ll be, if you follow their advice.
Financial consultant: Broker trying to appear respectable.
Financial planner: Financial consultant who might actually be respectable.
The smart money: Owners of whatever has lately performed well. No permanent members.
Federal Reserve: Extremely powerful, like God, and also moves in strange and mysterious ways.
Warren Buffett: Widely admired investor who is often quoted by lesser mortals seeking to buttress their arguments.
Futures: Trade these too much, and you won’t have one.
Collectibles: Justification for buying things that will never appreciate in value, but you really, really want.
Stock options: A way for senior executives to get rich.
Hedge funds: Like mutual funds, except with much higher fees. But the bragging rights are priceless.
Cash-value life insurance: Great strategy for retirement, assuming you’re an insurance agent and you can sell enough of these policies.
Variable annuities: Chance for ordinary investors to pay hedge-fund-like fees.
Commodities: Pigs with lipstick.

Excerpted from Jonathan Clements in the Wall Street Journal (subscription required), found via No Money In Poetry.

Filed Under: Investing //