Glossary Investment terms The following are explanations of some of the terms you would have come across in this guide. Asset Diversification Prime property Anything having commercial or exchange value that The practice of investing in a variety of assets. This A prime property is likely to be finished to a high Ais owned by a business, institution or individual. is a risk management technique where, in a well- standard, have a commercially attractive location Asset class diversified portfolio, any loss from an individual and be let to a financially sound tenant. Category of assets, such as cash, equities (or holding should be offset by gains in other holdings, Risk company shares), fixed income securities and their thereby lessening the impact on the overall portfolio. The chance that an investment’s return will be sub-categories, as well as tangible assets such as Dividend different to what is expected. Risk includes the real estate. Dividends represent a share in the profits of a possibility of losing some or all of the original Bond company and are paid out to the company’s investment. A loan in the form of a security, usually issued by shareholders at set times of the year. Total return a government or company, which normally pays a Equities The term for the gain or loss derived from an fixed rate of interest over a given time period, at the Shares of ownership in a company. investment over a particular period. Total return end of which the initial amount borrowed is repaid. Lease includes income (in the form of interest or dividend Capital growth A contract between a landlord and a tenant. It sets payments) and capital gains. Occurs when the current value of an investment is out the terms for the tenant to occupy the property. Volatile greater than the initial amount invested. Liquid When the value of a particular share, market or Commercial property A company is considered highly liquid if it has plenty sector swings up and down fairly frequently and/or Any property that is used for business purposes. The of cash at its disposal. A company’s shares are significantly, it is considered volatile. three main sectors are retail, industrial and offices. considered highly liquid if they can be easily bought Default or sold since large amounts are regularly traded. Z When a borrower does not maintain interest payments or repay the amount borrowed when due. 10