If you’re new to investing, the world of finance can feel like a different language. This quick glossary breaks down essential terms every beginner should know, so you can make smarter decisions from day one.

Investment

Investment is when you put your money into something like stocks, real estate, or a business with the goal of making a profit or increasing its value over time. 

Risk

The possibility that your investment could lose value. Risk is always present but can be reduced through diversification.

Return

The profit you earn from an investment. For example, if your stock increases in value after purchase, the gain is your return.

Savings

Money you set aside instead of spending. Even a small savings buffer is recommended before you start investing.

Portfolio

The total collection of all your investments like stocks, gold, crypto, etc. Managing and balancing your portfolio is key to long-term success.

Diversification

Spreading investments across different asset types instead of putting all your money in one place. Example: combining stocks, gold, and crypto in your portfolio.

Financial Literacy

The ability to understand and manage money, investments, and risk effectively. Higher literacy means better financial decisions.

Asset

Anything valuable you own like cash, real estate, gold, stocks, crypto, and more. Not all assets are investments, but many can be invested.

Stock

A type of investment that makes you a part-owner of a company. If the company grows, your shares can increase in value.

Cryptocurrency

Digital, decentralized currency such as Bitcoin or Ethereum. Highly volatile and high risk.

Fund

An investment vehicle where multiple investors pool their money, managed by professionals. Allows small amounts of money to access large markets.

ETF (Exchange-Traded Fund)

A fund that tracks a market index (e.g., S&P 500) and trades like a stock offering both diversification and flexibility.

Interest

The money you earn for lending your funds to a bank or other institution, such as in a savings account or term deposit.

Term

The length of time an investment is held. Short-term: a few months; long-term: several years.

Term Deposit

A savings account where your money is locked for a set period in exchange for interest. Early withdrawals usually forfeit earnings.

Inflation

The decrease in purchasing power over time as prices rise. Investing can help protect your money from inflation.

Liquidity

How easily an asset can be converted to cash. Cash is highly liquid; real estate is less so.

Dividend

A portion of a company’s profits paid to shareholders.

Broker

A company or platform that facilitates buying and selling of investments like stocks, funds, or crypto.

Euro Stoxx 50 

Tracks 50 of the largest and most liquid blue-chip companies in the Eurozone (across countries like Germany, France, Spain, the Netherlands, etc.).

BIST 100

The main stock index in Türkiye, tracking the 100 largest companies on the exchange.

AEX Index (Amsterdam Exchange Index)

Tracks the 25 most actively traded companies listed on Euronext Amsterdam.

Passive Income

Earnings generated with little to no ongoing work such as dividends or interest.

Stop Loss

A set price at which you automatically sell an investment to limit potential losses.

Volatility

The degree of variation in an asset’s price. High volatility means large and frequent price swings.

Profit Taking

Selling an investment while it’s profitable to secure gains.

AUM (Assets Under Management)

The total market value of assets managed by a fund or investment advisor.