A Liquidity Trap is an anomalous macro economic environment where very low interest rates make it difficult for a central bank (e.g., the Federal Reserve) to stimulate economic growth through monetary policy.

Buy-and-Hold is a popular investment strategy which focuses on long-term investments. It requires less day-to-day attention and is considered a passive investment manage strategy, which is not driven by short-term fluctuations in the market. The underlying premise of a buy-and-hold strategy include: (i) good investments grow in value over the long-term, (ii) the transaction costs of frequent transactions materially reduce investment returns, and (iii) most investors are unable to effectively time the market. Buy-and-hold strategies also minimize the effect of cognitive bias that arises in frequent trading and emotional reaction to short term market events.

Sell-side institutions and professionals provide services to institutional sellers in the financial markets. Their customers include bank, large businesses, funds, and other investors who seek to sell companies, large blocks of stock, or other securities. Many investment banks have groups that focus on the sell-side, as well as groups that focus on the buy-side.

Buy-side institutions and professionals provide services to institutional buyers in the financial markets. Their customers include bank, large businesses, funds, and other investors who seek to buy companies, large blocks of stock, or other securities. Many investment banks have groups that focus on the buy-side, as well as groups that focus on the sell-side.

Leverage is an investment technique that involves borrowing funds to invest, resulting in greater profit or loss than simply investing available capital. The use of Leverage increases risk, because it magnifies the effect of change in the value of an investment.

An Index (sometimes called a Market Index) is a conceptual basket of securities. Changes in the value of the Index are a indicator of changes in that market segment. Popular Indexes include the S&P500 Index and the Dow Jones Industrial Average (DJIA)

A Haircut represents the difference between the market value of an asset and the value used for a specific purpose, such as use of the asset as collateral for a loan. A Haircut reduces the risk associated with the possibility future changes in the market value of the asset.

An Investment Bank is a financial institution which focuses on helping businesses meet their capital needs. Investment Banks help businesses issue and sell securities, such as stock or bonds. They also help with mergers or acquisitions.

Net Present Value is a measure of the current value of a set of investments and income which occur over time. This provides an estimate of profitability based on a series of planned cash flows.

A Hedge Fund pools money from a group of investors (typically accredited investors or institutions) to invest using investment strategies and leverage in order to pursue high returns. They are typically high risk, less regulated, and expensive – meaning that they may not be appropriate investments except for sophisticated investors.