The ABCs Of Investing

If you’re like me, and sitting at home with nothing better to do, you’ve probably thought about dabbling a little in investing. Why not, right? If it’s good enough for your crypto-obsessed mate, it’s good enough for you. But all those terms and acronyms can get a little stressful, so I’ve put in the hard yards for you to get started on your big money journey.

Investing term 1: ASX

You’ve probably seen this one on the news, just about when you start getting super bored. When they talk about the ASX, they mean the Australian Securities Exchange. This is where all the magic happens, with stocks and other investment products being sold through here. Usually when we’re talking about it in the news, we’re actually talking about the ASX 200, which tracks the top 200 ASX listed stocks (the biggest Aussie companies). People follow this one as a sort of rule of thumb for how the Aussie economy’s going, as well as stuff like their super funds which usually have investments in these companies.

Investing term 2: ASXETFs

ETF stands for Exchange Traded Fund. This means that it’s a fund that can be traded in the same way as you’d buy and sell stocks from individual companies. The big difference is that you’re actually buying a part of a fund - which has invested into a bunch of different companies. Usually these are index funds - meaning they follow the performance of something like the ASX 200. There are also actively managed funds which create collections - maybe by industry or they remove companies considered controversial or unethical.

Investing term 3: IPO

IPO stands for Initial Public Offering, which is a big event where a company decides to transform from being privately held to a publicly traded company. That means that when someone buys a piece of that company through the stock exchange, the company gets some money that they can then put to good use. They usually get in touch with a finance company who takes a look at their books and decides how much the stocks should be worth - and sometimes those numbers can be way off.

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Investing term 4: NFTs

These have been making headlines as big celebrities (and some previous nobodies) have been selling these things for the big bucks. There’s a lot going into these things, but they’re more or less a way for people to try and sell digital art online by using the same tech they use for cryptocurrencies. They’re still pretty niche, but it’ll be interesting to see where this kind of technology goes.

Investing term 5: HODL

HODL stands for - almost got ya there! HODL is actually an intentional misspelling of HOLD, but has also been translated into Hold On For Dear Life - popular among those who are into crypto, it’s the idea that the real ones hang onto their investments despite the dizzying highs and crashing lows.

Consider this a little cheese platter of what’s out there in the investing world. It’s super important to be across how money works out in the big wide world, but it’s not really something you get taught in school or even by your parents. If you’re looking for the lowdown on how stuff works once you leave school, take a look at our Academies over here!