I recently read an article posted by Business Insider entitled, “Gen Z and millennial workers feel confused, irritated, and left out by endless ‘workplace jargon’ in the office, LinkedIn research shows.” Key points are:
- ”Almost half of Gen Z and Millennial workers say “workplace jargon” is making them feel left out.
- “A new survey by LinkedIn found that young professionals are puzzled by lingo like “ducks in a row.” (also “blue sky thinking” and “low hanging fruit”)
- “Two-thirds of Gen Z and Millennials think knowing workplace jargon could help them get ahead.”
“Some 60% of Gen Z and Millennials say the jargon is like a different language and as a result, almost half have made a mistake at work because they didn’t understand a phrase.” Wow! What an eye opener. I know from experience that this is true, however, and those of us who are more experienced are not doing ourselves any favors by conversing in language that can’t be understood by those entering the workforce.
Learn the Language
That research made me think about the world of investing. Below is an exercise to see how many of the basic terms used in the financial world you understand. Ready? Match the investment concept in column one with the right definition in column two.
| A. Asset Allocation | 1. Money set aside to create a safety net. |
| B. Common Stock | 2. Countries with more advanced economies. |
| C. Concentration Risk | 3. Basket of securities meant to measure a part of a market. |
| D. Credit Quality | 4. Strategy that mixes a wide variety of investments. |
| E. Developed Markets | 5. Like a mutual fund but traded on a stock exchange. |
| F. Diversification | 6. Value of a mutual fund’s assets minus its liabilities. |
| G. Dollar Cost Averaging | 7. Willingness to take on risk or variability. |
| H. Emergency Fund | 8. An investment strategy to balance risk with reward. |
| I. Emerging Markets | 9. Specific, measurable, achievable, relevant, and time bound goals. |
| J. ETF | 10. A measure of price movement up or down over time. |
| K. Fiduciary | 11. Ownership of a company represented by shares. |
| L. Fixed Income | 12. A legal relationship of good faith and trust. |
| M. Index | 13. Strategy of buying a set amount of an investment at regular intervals. |
| N. Liquidity | 14. The amount of risk required to meet goals. |
| O. NAV | 15. Rating of a bond issuer’s ability to repay a debt. |
| P. Risk Capacity | 16. Ease of conversion to cash with no or minimal loss. |
| Q. Risk Tolerance | 17. Brazil, Russia, India, China, for example. |
| R. SMART | 18. Issuer is required to make fixed payments at regular intervals. |
| S. Volatility | 19. Risk of loss due to high exposure to a stock or sector in a portfolio. |
The answers to the matching exercise are listed below. If you got all 19 correct, it is likely you have been investing for some time – you know the language! 15-18 correct is very good. A refresher may be beneficial, however. Review my blogs to fill in the gaps. Between 10 and 15 correct? That is good but even seasoned investors may benefit from a review. Less than 10 correct? For anyone with less than 15 correct, I recommend a copy of How to Dress a Naked Portfolio. Both a paperback and an e-version are available on Amazon. The book is not just for investing beginners. Many seasoned investors report that they learned about the different types of investment advisors, the differences between the types of fees and commissions charged or took the list of questions to ask advisors along with them to their next advisory meeting.
Many readers appreciate a review of the differences between commercial banks and credit unions and when one might be preferred over the other. The insurance features of all types of saving and investing accounts are covered as well as the whole concept of emergency funds. If you are a beginning investor, a step-by-step approach will assure a well-diversified portfolio just for you!
The book is a must for beginners to the financial world. Don’t let investment jargon discourage you or someone you love from creating a solid financial base. A little knowledge will empower you and will help you ask good questions.
Beverly J Bowers, CFP®
Answers: A8, B11, C19, D15, E2, F4, G13, H1, I17, J5, K12, L18, M3, N16, O6, P14, Q7, R9, S10.
