We all tend to use some jargon in conversation. But it’s best to keep that jargon – including highly technical terms – out of your commentaries.
If you’re having trouble finding the right words to describe financial concepts without using jargon, don’t fret. We’ve got investor-friendly alternatives that you can use.
Here are seven economic- and investment-related phrases that we find in commentaries all the time – along with some useful substitutes.
1. Headwinds and tailwinds
There’s an easy fix for these two troublemakers: replace headwinds with challenges (or negative conditions) and tailwinds with opportunities (or positive conditions).
2. Risk investments
We prefer to hedge the language and add an example.
Instead of saying “Investors moved their money out of risk investments…”, we write “Investors grew increasingly risk averse during the period, and moved their money out of what are generally perceived as ‘riskier’ investments.”
The solution is a bit more verbose, but it spells out exactly what happened.
3. Attractive valuation
This one may be obvious, even for a retail audience, but it has been questioned by one or two compliance officers. You can change it to: “Given our expectations for the company’s growth, its share price appears reasonable at this time.”
4. Easy monetary policy
It’s probably best to avoid getting into the complicated details of monetary policy. We often write something like, “The central bank maintained its low interest rate to encourage economic growth.”
5. Rates remained range bound
We say: “Interest rates didn’t move much during the period, and traded in a tight range of between 1.00% and 1.10%.”
6. The belly of the curve
“Mid-term bonds” is a little more investor friendly.
7. Tenor (as in “short-tenor loans” or “the loan has a tenor of two years”)
Tenor really means “time until a loan is repaid.” A loan might be issued with a five-year term to maturity, but after two years it has a three-year tenor. If you believe tenor isn’t appropriate for a retail audience, you can use “time until a loan is repaid.”
By simplifying your commentary language you may have to add a few words here and there, but we think it’s worth the effort to keep your retail clients – and your compliance team – happy.