Steady Glossary
Investing comes with a lot of jargon. This glossary explains the most common terms you'll see on this site and in everyday investing. We try to explain these terms in plain language. Use it as a quick reference whenever a concept feels unclear and then get back to the simple long-term habits that matter most.
A
Accumulating ETF (ACC)
An accumulating ETF is an exchange-traded fund that keeps the dividends or interest it receives and reinvests them back into the fund instead of paying them out to investors.
ETFs & Funds
Active Investing
Active investing means trying to beat the market by choosing specific investments or timing when to buy and sell.
Behavior
Asset Allocation
Asset allocation means how you divide your money between different types of investments, such as stocks, bonds and cash.
Portfolio & Risk
Asset Class
An asset class is a group of investments that share similar features.
Portfolio & Risk
Auto-Invest (Recurring Investing)
Auto-invest (recurring investing) means investing money automatically at regular intervals, such as every month, without needing to place each order yourself.
Compounding & Time
B
Bear Market
A bear market is a period when stock prices fall clearly and stay down for some time.
Behavior
Benchmark
A benchmark is a reference point used to compare how an investment is doing.
ETFs & Funds
Bid-Ask Spread
The bid-ask spread is the small difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept.
Trading Practical
Bond
A bond is a type of investment where you lend money to a government, company or other organization for a set period of time.
Portfolio & Risk
Broker
A broker is a company or platform that lets you buy and sell investments, such as stocks, ETFs or bonds.
Trading Practical
Bull Market
A bull market is a period when stock prices rise clearly and stay on an upward trend for some time.
Behavior
Buy and Hold
Buy and hold means buying investments and keeping them for a long time instead of trying to trade in and out based on short-term market moves.
Behavior
C
CAGR (Annualized Return)
CAGR stands for Compound Annual Growth Rate.
Compounding & Time
Capital Appreciation
Capital appreciation means an investment rises in value over time.
Basics
Capital Gain
A capital gain is the profit you make when you sell an investment for more than you originally paid for it.
Taxes
Compound Interest (Compounding)
Compounding means that your money can grow not only from your original investment, but also from the returns it has already earned.
Compounding & Time
Concentration Risk
Concentration risk means putting too much of your money into one investment, one company, one country or one type of asset.
Portfolio & Risk
Correlation
Correlation describes how two investments tend to move in relation to each other.
Portfolio & Risk
Cost Basis
Cost basis is the original value of an investment for tax and profit calculations.
Taxes
Currency Risk
Currency risk means that changes in exchange rates can affect the value of an investment when it is priced in a different currency than your own.
Portfolio & Risk
Custody Fee
A custody fee is a fee charged for holding your investments in an account.
Costs & Fees
D
Discipline
Discipline means following your investment plan consistently instead of reacting to emotions or noise.
Behavior
Distributing ETF (DIST)
A distributing ETF is an exchange-traded fund that pays out the dividends or interest it receives to investors instead of reinvesting that money back into the fund.
ETFs & Funds
Diversification
Diversification means spreading your money across different investments instead of putting it all in one place.
Portfolio & Risk
Dividend
A dividend is a payment that a company makes to its shareholders, usually from its profits.
ETFs & Funds
Dividend Yield
Dividend yield shows how much a company or fund pays in dividends each year compared with its current price.
ETFs & Funds
Double Taxation
Double taxation means that the same income can be taxed twice by two different countries or at two different stages.
Taxes
Downside Risk
Downside risk means the risk of losing money or earning less than you hoped for.
Portfolio & Risk
Drawdown
A drawdown is the decline in the value of an investment or portfolio from its previous peak to its lowest point before it recovers.
Portfolio & Risk
Duration
Duration is a measure that shows how sensitive a bond or bond fund is to changes in interest rates.
Portfolio & Risk
E
Emergency Fund
An emergency fund is money kept aside for unexpected expenses or difficult situations, such as losing your job, a large repair bill or a sudden medical cost.
Basics
ETF (Exchange-Traded Fund)
An ETF is a fund that holds many investments and can be bought and sold on the stock exchange, much like a share.
ETFs & Funds
Expected Return
Expected return is the return an investor reasonably hopes for over time, based on assumptions rather than certainty.
Portfolio & Risk
Expense Ratio (TER/OCF)
Expense ratio shows the yearly cost of owning a fund or ETF.
Costs & Fees
F
Fees (Investing Costs)
Fees are the costs you pay when you invest.
Costs & Fees
FIFO
FIFO stands for First In, First Out.
Taxes
Financial Goal
A financial goal is the reason you are saving or investing your money.
Basics
FOMO (Fear of Missing Out)
FOMO stands for Fear of Missing Out.
Behavior
Fractional Shares
Fractional shares let you buy part of a share instead of a whole share.
Trading Practical
FX Fee (Currency Conversion Fee)
An FX fee is the cost you pay when money is converted from one currency to another during investing.
Costs & Fees
G
Gross Return
Gross return is the return of an investment before fees, costs and taxes are taken away.
Costs & Fees
H
Hedged vs Unhedged
Hedged and unhedged describe whether an investment tries to reduce the effect of currency movements or leaves that currency risk in place.
Portfolio & Risk
Herd Behaviour
Herd behaviour means copying what many other investors are doing instead of following your own plan.
Behavior
Home Bias
Home bias means investing too much of your money in your own country compared with the global market.
Portfolio & Risk
I
Index
An index is a list or measure that tracks the performance of a group of investments, such as stocks or bonds.
ETFs & Funds
Index Fund
An index fund is a fund that aims to follow the performance of a market index instead of trying to beat it.
ETFs & Funds
Index Investing
Index investing means investing through funds or ETFs that aim to follow a market index.
ETFs & Funds
Inflation
Inflation means that prices rise over time.
Basics
Investing
Investing means putting money into assets such as stocks, bonds, funds or ETFs with the goal of growing its value over time.
Basics
L
Limit Order
A limit order is an order to buy or sell an investment at a specific price or better.
Trading Practical
Liquidity
Liquidity means how easily an investment can be bought or sold without causing a large change in its price.
Trading Practical
Long-Term Investing
Long-term investing means investing with a time horizon of many years instead of focusing on short-term price movements.
Compounding & Time
Lump Sum Investing
Lump sum investing means investing a larger amount of money all at once instead of spreading it out over time.
Compounding & Time
M
Market Capitalization (Large/Mid/Small Cap)
Market capitalization or market cap, means the total market value of a company’s shares.
Portfolio & Risk
Market Order
A market order is an order to buy or sell an investment immediately at the best available price in the market.
Trading Practical
Market Timing
Market timing means trying to predict the best moments to buy or sell investments based on expected market moves.
Behavior
Monthly Investing (Dollar-Cost Averaging, DCA)
Monthly investing means investing a fixed amount of money at regular intervals, such as every month, instead of investing everything at once.
Compounding & Time
Mutual Fund
A mutual fund is a pooled investment fund where many investors’ money is combined and invested together.
ETFs & Funds
N
Net Return
Net return is the return you keep after costs, fees and taxes have been taken into account.
Costs & Fees
O
Opportunity Cost
Opportunity cost means what you give up by choosing one use of money instead of another.
Basics
Overconfidence
Overconfidence means believing too strongly in your ability to predict markets or choose winning investments.
Behavior
P
Panic Selling
Panic selling means selling investments quickly because of fear during a market decline.
Behavior
Passive Investing
Passive investing means investing in a simple way that aims to follow the market rather than beat it.
Behavior
Permanent Loss of Capital
Permanent loss of capital means losing money in a way that is unlikely to recover.
Portfolio & Risk
Platform Fee
A platform fee is a fee charged by an investment platform or broker for using its service.
Costs & Fees
R
Real Return vs Nominal Return
Nominal return is the return on an investment before inflation is taken into account.
Basics
Realized vs Unrealized Gains
A realized gain is a profit you have locked in by selling an investment.
Taxes
Realized vs Unrealized Losses
A realized loss is a loss you lock in by selling an investment for less than you paid.
Taxes
Rebalancing
Rebalancing means adjusting your portfolio back to your original target mix after different investments have grown or fallen by different amounts.
Portfolio & Risk
Recency Bias
Recency bias means giving too much importance to what has happened recently.
Behavior
Reinvestment
Reinvestment means putting dividends, interest or other cash payouts back into investments instead of spending them.
Compounding & Time
Risk
Risk means the chance that an investment will not perform as you hoped, or that its value may fall.
Portfolio & Risk
Risk Capacity
Risk capacity means how much investment risk you can financially afford to take.
Portfolio & Risk
Risk Tolerance
Risk tolerance means how much investment uncertainty and market ups and downs you can handle emotionally.
Portfolio & Risk
Risk-Adjusted Return
Risk-adjusted return looks at return together with the level of risk taken to achieve it.
Portfolio & Risk
S
Saving
Saving means setting money aside for future use instead of spending it now.
Basics
Savings Account
A savings account is a bank account designed for keeping money safe and easily available, while earning a small amount of interest.
Basics
Sequence of Returns Risk
Sequence of returns risk means that the order in which good and bad returns happen can affect your final outcome.
Portfolio & Risk
Slippage
Slippage means the difference between the price you expected and the price you actually got when a trade was executed.
Trading Practical
Stock
A stock is a small ownership share in a company.
Basics
T
Tax Deferral
Tax deferral means delaying taxes until a later point instead of paying them immediately.
Taxes
Tax Treaty
A tax treaty is an agreement between countries that helps reduce or clarify double taxation.
Taxes
Tax-Efficient Investing
Tax-efficient investing means arranging your investments in a way that reduces unnecessary taxes.
Taxes
Tax-Loss Harvesting
Tax-loss harvesting means selling investments at a loss in order to use those losses to offset gains for tax purposes.
Taxes
Taxable Event
A taxable event is something that can trigger tax.
Taxes
Time Horizon
Time horizon means how long you expect to keep your money invested before you need to use it.
Compounding & Time
Total Return
Total return is the full return from an investment, including both price growth and any income it pays, such as dividends or interest.
Basics
Tracking Difference
Tracking difference shows how much a fund or ETF’s return differs from the return of the index it is supposed to follow.
ETFs & Funds
Tracking Error
Tracking error shows how consistently a fund or ETF follows its index over time.
ETFs & Funds
Trading Fee
A trading fee is a cost charged when you buy or sell an investment.
Costs & Fees
U
UCITS ETF
A UCITS ETF is an ETF that follows European Union rules designed to improve investor protection, transparency and diversification.
ETFs & Funds
V
Volatility
Volatility means how much the price of an investment moves up and down over time.
Portfolio & Risk
W
Withholding Tax
Withholding tax is tax that is taken from investment income before the money is paid to you.
Taxes
Y
Yield
Yield is the income an investment produces compared with its price or value.
ETFs & Funds