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Information on investing

This information hub has a list of the most commonly-used business and financial terms that have the root word ‘invest’ in them, plus links to more comprehensive explanations. From the root word ‘invest’ you get investment, investing, investor, etc.

Activist Investor – an individual or group of people who buy up loads of shares in a company so that they may influence management decision-making. The activist investor is a minority stockholder. Also called an activist shareholder.

Alternative Investment – refers to investments other than cash, bonds or stocks. Examples include art, stamps, coins, antiques, commodities, and property.

Angel Investor – an individual who invests in a start-up business with his or her own money. The investment is typically done in exchange for part-ownership or convertible debt. Also known as a seed investor, business angel, or simply angel.

Chief Investment Officer (CIO) – an executive in charge of a company’s or financial institution’s investments. It is usually a board level position. The CIO is in charge of managing and supervising all activities related to investments, maintaining good investor relations, working with outside analysts, and managing pension investments.

Contrarian Investing – investing in the opposite way to everybody else. In a bear market the individual is bullish, and is bearish in a bull market.

European Investment Bank (EIB) – a European Union bank that lends money for infrastructure projects, such as roads, tunnels, railways, etc. It is also involved in helping business development, mainly within the trading bloc, but also outside. The EIB is the world’s largest public lending institution.

Growth Investing – a strategy in which the investor concentrates on capital appreciation, rather than investment income. The individual is known as a growth investor.

Institutional Investor – a company that trades in shares and other financial assets in massive quantities. Examples include mutual funds, endowments, insurance companies, and pension funds.

Investing – if you are investing you are committing your money, time or energy for a future benefit. We invest money in order to make a profit, increase production, or make our businesses more effective.

Investment – the application of resources such as money to make more money or bring a future benefit. Investment may also refer to the purchasing of goods that are not consumed now, but are used for future production and the generation of income. In finance it means an asset that will rise in value and will either be sold at a profit or will provide an income.

Investment Analyst – an individual who specializes in studying investment. He or she advises stockbrokers, market traders and portfolio managers. Also known as a financial analyst or equity analyst.

Investment Bank – a specialized bank that does not take deposits. Investment banks specialize in services to major investors (such as pension funds) and companies. In the UK/Ireland they are also called merchant banks.

Investment Club – a group of people who pool their money and make investments. Investment clubs may have up to 100 members. Members meet regularly and decide (typically by voting) which investments to buy and sell.

Investment Horizon – refers to how long you plan to have your money tied up in investments. Young adults investing in a pension, for example, have an investment horizon several decades away. Often called an investment time horizon.

Investment Philosophy – an individual’s particular style and investing approach. How he or she views the market, how long they plan to invest, and which companies or sectors to focus on. Also known as a person’s investment style.

Investor – an individual, firm or organization that invests money into a project or business hoping to make a profit, receive some kind of benefit, or gain an advantage.

Investor Relations – a sub-function of public relations found in larger companies. Investor relations executives deal with the investor community, including stockholders, investors and others who may be interested in the company’s shares or financial stability. Also known as financial communications and financial public relations.

Real Estate Investment Trust (REIT) – a firm that owns and usually operates a portfolio of properties and mortgages. REITs investors receive a share of the income that is generated through the ownership of commercial property.

Responsible Investment – an investment that is expected to provide an economic return, as well as some kind of benefit to people, the system or the planet, such as reducing poverty, helping the environment, or promoting justice. Also called green investing, ethical investing, sustainable investing, and triple-bottom-line investing.

Retail Investor – an individual who rather than using other people’s/organizations’ money, uses his/her own. Retail investors typically trade in much smaller amounts compared to institutional investors.

Return on Investment (ROI) – a measure of how profitable an investment is. One with a high ROI generates a favorable profit compared to the investment cost. Also known as return on net worth or return on owners’ investment. Put simply, it measures how much we got back from our initial investment.

Socially Responsible Investing – refers to investing into businesses that adhere to moral, ethical or environmental standards. Socially responsible investors may refuse to invest in firms that sell weapons, tobacco products, or those involved in gambling. Also called socially conscious investing, green investing, ethical investing, or SRI.

Speculative Investment – an investment where all that matters, as far as the investor is concerned, is the short-term profit that can be made. A speculative investor is known as a speculator.

Value Investing – involves buying securities for less than they are worth with the expectation of making money. This style of investing appeared after the publication of Benjamin Graham’s and David Dodd’s book ‘Security Analysis’ (1934).

Vulture Investor – an individual or firm that concentrates on the buying assets and financial instruments of companies or people in trouble.