# 1 Share - What is a share?
When you buy a stock, you buy a share of a company. Shares can be traded freely and the price may vary widely. Blue. Depending on how the business is performing and how its prospects are. If you can sell the stock at a higher rate than the one you bought it, you can earn it. If the reverse happens, you lose money trading in shares. Only companies that are listed on the stock can be bought in.
# 2 bond - What is a bond?
When you buy a bond, you borrow money for those who issue the bond - it's usually a mortgage bank, the state or a company. Unlike a share, a bond has a maturity, which describes how long it applies. At the time the bond runs, you typically get a fixed interest rate each year. You also receive the nominal value of the bond back. It can either be in installments or at one time when the bond expires. Bonds are generally regarded as a less risky way of investing than purchases of shares. But it is very common that you invest in both to spread the risk.
# 3 Securities - What is a Securities?
Securities are a broad term for papers that prove that you own a share of something or have something to do. Thus, when investing, you buy securities. The most well-known types of securities are equities and bonds, but a security can also be an investment certificate from an investment fund or investment fund.
# 4 Portfolio - What is a portfolio?
A portfolio is a group of shares, bonds and other securities. When someone talks about their 'portfolio', they simply mean 'all their investments'. Portfolio is a review of the Italian word portafoglio, which means "bearing a magazine".
# 5 Index - What is an index?
An index represents a group of selected shares or bonds, which typically come from the same geographical area and have a certain size. There are many different indices in the world. Some of the most famous are the S & P500 and Dow Jones Index in the United States, FTSE in England and the Nikkei Index in Japan. In Denmark, the most famous index is C20 and covers the 20 most traded shares in the country.
# 6 Annual costs as a percentage - What is that?
Annual costs as a percentage is an abbreviation of the term "annual cost per cent". OPP is the most common way of describing the price of investing through an investment fund in Denmark. When all providers disclose the price in OPP, it will be easier for investors to compare the prices of different investments. With June, you will also see the price quoted as "ongoing charge". It is another way to calculate the price, but it is not directly comparable to OPP, as the current charge does not include trade costs, whereas OPP does.
# 7 Risk Permission - What does risk tolerance mean?
You can not invest without risk. There is usually a correlation between how much risk you take and how much potential return you can get. Therefore, everybody who invests has to consider how much their risk willingness is. They simply need to decide how high or low risk they are safe to have with their investments. At June, we have made an online test with six simple questions that you can take to test your risk willingness. Take the test here.
# 8 Time Horizon - What is a time horizon?
Your time horizon describes how long you plan to hold on to your investment before you want to sell it again. For example, if you invest to save up to a five-year conversion, your time horizon will be five years. The time horizon is very important in terms of the type of investment you should choose. As a rule of thumb, you say that the longer your time horizon is, the more risk you can take.
# 9 ETF - What is an ETF?
ETF stands for Exchange-Traded Fund. An ETF can be traded on the stock exchange like a share. But unlike one share, when you buy an ETF, you become a shareholder of a fund. The fund then owns a selection of shares or bonds, which it typically adjusts to always match a given index. Therefore, the owner of a share in an ETF is sure to always get a return that corresponds to the average of the index. Junes funds invest all in ETFs.
# 10 Diversification - What is Diversification?
Diversification, or just spreading, means dividing its money into several different securities within and between different types of investments. For example, investing in several stocks and bonds, maybe even in several parts of the world. As a rule of thumb, most experts recommend a certain level of diversification as it reduces the risk of the overall portfolio.
I hope you enjoyed my blog. Thank you for taking your time to read it.