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Asset Management Jargon Buster

Asset allocation – A type of investment strategy that aims to balance out risk of financial loss in a portfolio by dividing, or ‘diversifying’ its asset categories.

Asset class – The ‘class’ by which an asset is categorised. ‘Traditional’ asset classes are stocks, cash and bonds. You can find out more on working with different kinds of asset classes over in the asset management section!

Diversification – This is a very important part of risk management strategy. Asset managers will often ‘diversify’ the portfolios they handle by investing in various types of assets – some lower risk than others – as part of their strategy to minimise risk.

Forex market – Also known as the Forex market, or ‘FX’, this is where currencies are bought and sold.

‘Go long’ – A phrase which means to buy on the financial markets.

‘Go short’ – A saying which means to sell on the financial markets.

Time horizon – The time scale for investment in order to reach a specific financial goal.

Portfolio – This is the collection of assets and investments belonging to an individual, family or company, hedge fund or institution. Asset managers are responsible for ensuring the assets within a portfolio generate the most money possible!