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Taking a walk down Wall Street is a lot like taking a vacation abroad. You come home with less money and you haven't a clue what half the people said.
Baffled by financial lingo?
So you are better prepared for the investment year ahead, and you have a fighting chance of making at least a little money, here's a guide to 41 key Wall Street phrases.
Profit-taking: All-purpose explanation for why the market went down.
Technical factors: Alternative all-purpose explanation for why the market went down. Also useful for explaining why the market went up or sideways.
Resistance level: Under no circumstance should stocks rise above this level unless, of course, they do.
Support level: Under no circumstance should stocks fall below this level unless, of course, they do.
Bear trap: A market rally that the pundits failed to predict.
Correction: A major market crash made to sound like a minor mistake.
Going south: Wall Street phrase used to describe falling share prices, while simultaneously insulting everybody on the other side of the Mason-Dixon Line.
Short sellers: Investors who seek to profit from stock prices going south. As children, enjoyed pulling legs off spiders.
Momentum investor: Buyer of stuff that's already gone up.
Value investor: Buyer of stuff that looks like it'll never go up.
Market strategists: Remember the quip about there being old pilots and bold pilots, but no old, bold pilots? You guessed it: Those guys became market strategists instead.
Broker: What you'll be, if you follow their advice.
Financial consultant: Broker trying to appear respectable.
Financial planner: Financial consultant who might actually be respectable.
Market timers: The devil personified, according to buy-and-hold investors.
Buy-and-hold investors: The devil personified, according to market timers.
Financial journalists: Folks who wanted to be sports writers, but didn't make the cut.
The smart money: Owners of whatever has lately performed well. No permanent members.
Small investors: Among Wall Street employees, synonymous with "foolish."
Brother-in-law: Source of free investment advice that will cost you dearly.
Federal Reserve: Extremely powerful, like God, and also moves in strange and mysterious ways.
Warren Buffett: Widely admired investor who is often quoted by lesser mortals seeking to buttress their arguments.
Futures: Trade these too much, and you won't have one.
Collectibles: Justification for buying things that will never appreciate in value, but you really, really want.
Derivatives: See "futures."
Stock options: A way for senior executives to get rich.
Listed options: A way for small investors to get fleeced.
Hedge funds: Like mutual funds, except with much higher fees. But the bragging rights are priceless.
Cash-value life insurance: Great strategy for retirement, assuming you're an insurance agent and you can sell enough of these policies.
Variable annuities: Chance for ordinary investors to pay hedge-fund-like fees.
Index mutual fund: Boring investment that guarantees you'll keep pace with a market index.
Exchange-traded index fund: Also guarantees that you'll keep pace with a market index but, for some reason, considered exciting and sophisticated.
Internet stocks: The investment of the future, and always will be.
Commodities: Pigs with lipstick.
Lottery tickets: Buying opportunity for folks who feel they don't pay enough state taxes.
Car lease: Chance to pretend you are wealthy, while getting poorer with every monthly payment.
Credit cards: Another chance.
Mortgage: Allows you to make a massively leveraged bet on a pile of bricks and timber, and still appear perfectly respectable.
Extended warranty: Pitched as a way to insure against defects, after the salesman has just told you how wonderful the product is.
Home improvements: Opportunity to spend money on yourself, while pretending its an investment.
Saving: Quaint notion, now long forgotten.
Disclosure: Taken from The Wall Street Journal.
Jonathan Clements also writes the "Getting Going" column that appears Wednesdays in The Wall Street Journal. Write to him at: jonathan.clements@ws
j.com.
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