A little less jargon.
A lot more clarity.

Asset allocation

How a portfolio is divided among asset types, such as stocks, bonds and cash.

In practice An illustrative $100 portfolio with $60 in stocks and $40 in bonds has a 60/40 allocation.

Benchmark

A reference used to compare an investment’s performance. Its rules and exposures determine whether the comparison is useful.

In practice A technology-only index is a different yardstick from a broad stock-market index.

Bond

A debt investment: an issuer promises payments under specified terms. The issuer can fail to pay, and market prices can change.

In practice A bond’s maturity date and coupon describe different things: repayment timing and interest terms.

Compound interest

Interest earned on both the starting amount and interest already added to it.

In practice At a hypothetical 5% a year, $100 becomes $105, then $110.25 if interest stays invested.

Custody

How access to cryptoassets is controlled and safeguarded. Keeping your own keys and relying on a provider involve different responsibilities and risks.

In practice A provider’s failure and losing a self-managed key are different ways access can be lost.

Diversification

Spreading exposure across investments to reduce dependence on one holding. Broad market losses can still affect a diversified portfolio.

In practice Two funds with nearly identical holdings may add little diversification.

Dollar-cost averaging

Investing equal amounts at regular intervals. Each contribution buys more shares at lower prices and fewer at higher prices.

In practice A $100 purchase buys two shares at $50 each, or one share at $100.

Exchange rate

The price of one currency in another. The order of the currencies matters when reading a change.

In practice If one USD buys more INR than before, the dollar has strengthened against the rupee.

Exchange-traded fund

A pooled fund with shares traded on an exchange. Its investment approach may track an index or use active decisions.

In practice The ETF structure alone does not tell you which companies or assets the fund owns.

Expense ratio

Annual fund operating expenses expressed as a percentage of fund assets. It does not necessarily include every cost an investor pays.

In practice A lower expense ratio does not eliminate brokerage charges, spreads or investment risk.

Index fund

A fund designed to follow a specified market index. Costs and tracking methods can cause its results to differ from the index.

In practice A narrow sector index and a broad market index can have very different concentrations.

Inflation

A rise in the general price level over time, reducing what the same amount of money can buy.

In practice If a hypothetical basket rises from $100 to $103, that basket costs 3% more.

Liquidity

How readily an investment can be sold when needed. A sale may take time or require accepting a lower price.

In practice A displayed price does not ensure a large order can be executed at that price.

Principal

The starting amount invested or borrowed, distinct from the interest it earns or costs.

In practice In a $100 savings example earning $5 of interest, the original principal is $100.

Private key

Secret cryptographic information used to authorize transactions. Access to it can give someone control over the associated cryptoassets.

In practice Montara never asks you to enter a private key.

Rebalancing

Adjusting holdings toward a chosen allocation after their proportions change. Trades or new contributions may be used.

In practice An allocation that drifts from 60/40 to 65/35 can be adjusted toward its original mix.

Recovery phrase

A sequence of words that can restore access to a compatible crypto wallet. Anyone who obtains it may be able to take control.

In practice Keep it private. A lesson, support chat or giveaway should never need it.

Reference rate

A published rate for information or comparison. The ECB’s currency references are not prices at which you can necessarily transact.

In practice A daily reference chart and a bank’s currency conversion quote can differ.

Risk tolerance

The losses and uncertainty someone is willing and able to accept. It depends on more than how a price chart feels.

In practice Money needed for an imminent payment has different constraints from money set aside for a distant goal.

Time horizon

The time before invested money is expected to be needed. Different goals can have different horizons.

In practice A payment due next month and a goal twenty years away have different timelines.

Volatility

The extent to which investment prices fluctuate. It describes one dimension of risk, not every possible way to lose money.

In practice A quiet price history does not rule out fraud, default or difficulty selling.

Yield

An income measure relative to an investment’s price or value. Different yield conventions can describe different things; it is not automatically total return.

In practice Price changes and fees can make an investor’s outcome differ from the quoted yield.