investing

5 financial terms not to take for granted

Financial jargon with multiple meanings
Financial jargon with multiple meanings © Margarita Borodina/Shutterstock.com

When it comes to listening to pitches from brokers and advisers, what you hear isn't always what you get. Unfortunately, financial terms used to describe an investment's features and benefits can mean different things to different investors, advisers and even to different investment firms and insurance companies. Ultimately, products that are sold on the basis of safety, guarantees, flexibility or expected returns can yield very different results. Yet these words are bandied about as if they each have a universal meaning.

In a financial world plagued by jargon, small print and scams, it's more important than ever that investors not accept vague promises or rely on their own interpretation of words used to persuade them about where and how to invest their life savings. Instead, they must be prepared to ask the right questions and separate perceptions from reality.

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