Absolute return funds are investment funds designed to make money in all market conditions. They focus on returns rather than trying to outperform the market, and employ a range of strategies - like short selling - in an aim to profit regardless of market direction.
Learn moreAfter hours trading refers to the buying and selling of assets outside the standard trading hours of major exchanges such as the New York Stock Exchange. It might be used in an attempt to capitalise on price movements following key news events, to hedge, or to avoid price gapping. After hours trading can potentially be more volatile, and therefore risky.
Learn moreThe Amex Index refers to a series of stock market indices on the NYSE American, which lists small to medium-sized US and international companies, providing a benchmark for their performance.
Learn moreIn finance, animal spirits refer to the emotional and psychological factors that drive traders’ decisions, leading to fluctuations in financial markets beyond what would be expected from rational behaviour.
Learn moreAn asset refers to any resource with economic value that an individual, company, or institution owns or controls with the expectation that it will provide future financial benefit. Assets can include shares, commodities, real estate, and currencies, many of which can be traded with derivative products such as CFDs.
Learn moreAsset valuation is the process of determining the current worth of a financial asset or company. It might involve methods such as discounted cash flow analysis, comparable company analysis, or using market values for assets like stocks and bonds to establish their fair market value.
Learn moreAttitude to risk refers to the willingness of a trader to take positions that represent a higher chance of losing their capital. More risk-averse traders prefer lower risk assets that may have less upside but also less downside, while risk-seeking traders accept the higher chance of losing money for more potential upside.
Learn moreAn audited account is a financial statement that has been examined and verified by an independent auditor. The audit process ensures that the accounts accurately represent the entity’s financial position and comply with relevant accounting standards and regulations. This provides assurance to stakeholders about the accuracy of financial reporting.
Learn moreAutomated market making (AMM) is a type of trading system that uses algorithms to set buy and sell prices, providing continuous liquidity to markets. AMMs determine prices based on trading volume and demand, functioning without traditional human market makers.
Learn moreThe gains or losses you make on your investments over a certain period of time. Returns can take the form of income, such as interest payments, or capital gains if your investments rise in value.
Returns play a key role in the financial world, since they're one of the main reasons why people make investments. You'll hear them mentioned in relation to everything from shares and bonds through to property.
The returns you make on your investments are often linked to your appetite for risk. For example, higher-risk investments may have the potential for stronger returns than lower-risk choices. On the other hand, riskier investments are more likely to make a loss.
Common examples of returns include the interest which is paid out at regular intervals by bonds, and the dividends that are paid out to shareholders by listed companies. They could also include things like rents if you own and lease out properties.
To determine the success of an investment, it's helpful to calculate the rate of return. For more on this, see rate of return .