Volatility: The rate and extent at which the price of a portfolio, security or index, moves up and down. If the price swings up and down with large movements, it has high volatility. If the price moves more slowly and to a lesser extent, it has lower volatility. It is used as a measure of the riskiness of an investment.


Monetary policy: The policies of a central bank, aimed at influencing the level of inflation and growth in an economy. It includes controlling interest rates and the supply of money. Monetary stimulus refers to a central bank increasing the supply of money and lowering borrowing costs. Monetary tightening refers to central bank activity aimed at curbing inflation and slowing down growth in the economy by raising interest rates and reducing the supply of money.


Quantitative easing (QE): An unconventional monetary policy used by central banks to stimulate the economy by boosting the amount of overall money in the banking system.


Inflation: The rate at which the prices of goods and services are rising in an economy. The CPI and RPI are two common measures. The opposite of deflation.


Market correction:  Commonly accepted as a decline of 10% or greater in a stock market (or individual security or asset).


Options: Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at an agreed-upon price and date.


VIX (CBOE Volatility Index): A real-time market index that represents the market’s expectations for volatility over the coming 30 days.


Hedging/hedges: Hedging consists of taking an offsetting position in a related security, in order to diversify or manage risk in a portfolio. Various techniques may be used, including derivatives.


Bond yields: The level of income on a bond, calculated as the coupon payment divided by the current bond price. ‘Real’ yield is the yield minus the rate of inflation. When yields are rising, this indicates that bond prices are falling, and vice versa.


Value investing: Value investors search for companies that they believe are undervalued by the market, and therefore expect their share price to increase.


Growth investing: Growth investors search for companies they believe have strong growth potential. Their earnings are expected to grow at an above-average rate compared to the rest of the market, and therefore there is an expectation that their share prices will increase in value.