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Is investment jargon as scary as skydiving?

Investment jargon can be as scary as skydiving
Investment jargon can be as scary as skydiving Investment jargon can be as scary as skydiving

IT seems that investment jargon can be enough to make you want to run screaming for the hills.

A first-of-its-kind study from Barclays Smart Investor and Goldsmiths University found that complicated investment terms can be so intimidating that they provoke a physical reaction.

Nearly half of the people surveyed reported an increased heart rate when presented with investment jargon, whilst one in five said it made them break out in a sweat.

The terms that most terrified people were ‘stockbrokers’ ‘asset manager’ and ‘investment risk’, with ‘pension’ and ‘FTSE’ also causing a stress reaction.

Dr Pete Brooks, head of behavioural finance at Barclays Smart Investor, said: “These results suggest that it isn’t just a lack of understanding which is the barrier to investing; there appears to be a much more sub-conscious reaction to the language of investing.”

However, if you’re baffled by financial terminology then you’re not alone. Our research found that one in 10 people thought a ‘blue-chip stock’ was a poker move, whilst 29 per cent assumed a ‘bull market’ was a place in Birmingham.

It’s hardly surprising then that three-quarters of those surveyed said they didn’t feel confident enough to invest their money, with a quarter feeling as worried by the thought of investing as skydiving.

To try to dispel some of the confusion surrounding investing, here are some of our top tips to help make investment jargon less daunting:

1 Break it down - If you come across a whole load of investment lingo you simply don’t understand, it’s easy to feel overwhelmed. However, rather than panic, try to break it down sentence by sentence and look up any terms you’re uncertain of. Dealing with it in small chunks can be less intimidating that trying to get to grips with everything all at once.

2 Explore lots of different sources of information - Just because you’ve read something you really don’t understand, that doesn’t mean everything you read about investing is going to be packed with jargon. There’s lots of information out there which goes back to basics to make your investment journey easier.

3 Fight your fears - It’s human instinct to want to run away from the things that frighten us. Any meaningful decision can be tough, particularly when it means moving from things which feel comfortable to things which involve a bit more risk, like investing. You may get similar feelings if you consider leaving the security of a job you have been in for a while to take the plunge of running your own business. Focussing on what you are trying to achieve can help you understand the steps you take to get there.

4 Talk to someone in the know - If you know anyone who has plenty of investing experience, it’s often a good idea to ask them to explain the basics to you. Having a conversation about investing can be less daunting than reading up on a subject, and once you’ve discussed it, it might make anything you read on investing easier to understand. Remember though, you shouldn’t follow anyone’s advice unless they are properly authorised and regulated to provide it.

5 Get professional help - If you’re still not confident about getting to grips with financial jargon, or whether investing is right for you, seek professional financial advice. An adviser should be able to recommend the investments that are suitable for you and explain how they work, so you can be confident you’re not putting your money into anything you don’t understand.

:: Jonathan Sloan is a director at Barclays Wealth & Investments NI