Fool's School Defining Terms

New investors are often confused by financial jargon. Here's a mini-glossary that can help you be more financially literate. Asset classes: The three major asset classes are cash (also called cash reserves, money market instruments or moolah), bonds and stocks. Board of directors: A group of people elected by a corporation's shareholders to oversee the management of the company.

The board members meet several times each year, are paid in cash and/or stock, and take on legal responsibility for corporate activities. Cold call: It's cold because the person calling doesn't know you from a snowdrift. To build their business, many new brokers must call people they don't know and try to sell an investment idea or their services as a broker. Correction: A short-term drop in stock market prices. The term correction comes from the notion that, when this happens, an overpriced individual stock, market segment, or stocks in general ...