Concise Encyclopedia of Investing

Citation

Reid, C. (2007), "Concise Encyclopedia of Investing", Library Review, Vol. 56 No. 9, pp. 843-844. https://doi.org/10.1108/00242530710831374

Whether you want to dabble in stocks and shares, have a financial adviser to do it for you or just better understand the financial pages of your daily newspaper, an understanding of the specialist terminology used can be very helpful. The finance and investment world is full of specialist concepts, acronyms and jargon. What, for example, is meant by a “preferred stock” or “gap openings”? How do you find your way through bonds, STRIPS, TIPS and guaranteed investment contracts? This slim volume therefore sets out to “provide clear, concise explanations of basic as well as more advanced investment terms”. It aims to meet the needs of both the newcomer to the area and those who are already well versed in financial terms.

Just over 120 terms are covered in one alphabetical sequence. The definitions which are usually about a couple of paragraphs in length, use clear, straight forward language so that the average investor can understand and use the techniques and concepts. The author, himself a financial analyst, includes numerous practical examples to assist with understanding a term. Hence we are told, for example, what a price‐earnings ratio is used for, the different ways in which it can be calculated, how it can be used to compare companies and given a specific example of how to calculate it. A short bibliography of web sites and reference books is included to allow for more detailed follow on reading, and a five page index allows for the location of terms used within the entries themselves.

This volume is primarily aimed at someone wishing to understand investment terminology used in the US market. There are entries for Freddie Mac, Ginnie Mae, and 401 K and 408 K retirement plans – and you will look in vain for definitions of PEPS or ISAs which are common investment vehicles in the UK. The inclusion of “encyclopedia” in the title of this work is a misnomer. However, the author has utilized his expertise of advising individual investors and listed the key financial techniques and concepts. An individual wishing to make sense of investment market speak will have a useful starting point.