Investment glossary for beginners. Discover your investor profile

A glossary of terms related to investments for those just starting. Learn more about your profile as an investor.

Investment glossary for beginners. Discover your investor profile
Beginner's vocabulary of financial terms. Learn about your investing profile. Photo by Austin Distel / Unsplash

If one of your financial goals is to start investing, but you don't know much about it and you have several doubts, such as: can I lose my money? What is the best option to do it? Do I need a lot of capital to start? Take a deep breath and take it easy.

In this article, we will help you get the answers to these questions and provide you with the basic information you need to know about this topic through an investment glossary for beginners.

The first thing you should learn is the concept of investment, which is not for nothing since it is rarely confused with savings. Saving and investment, although they go hand in hand, are two different topics. The main difference is in the destination of the money.

The key concepts you should understand about investing


It consists of putting your money to work to multiply it. You can deposit your resources into some of the financial instruments to generate profits in the short, medium, or long term. The first thing you should ask yourself is, "How much money do I have to invest?"


It is the possibility that you will not profit from your investment. You should know that in almost all investment instruments there is a risk of loss. It is recommended to inform yourself before investing in any of them, besides trying to diversify your investment. In this way, if in one instrument you do not do very well, in others you can ensure your returns.


It is your money, or, in other words, all those financial resources that you have available for investment.


A percentage of the total gain or profit obtained from the investment.


This is the time you will keep your money in an investment instrument. It is important to understand that the return is linked to the term in which you keep your investment, so patience is key to obtaining higher profits.

Investment strategy

You must know that, to begin with, you need an investment strategy since one of the main recommendations is not to invest all your capital in only one instrument. To put it colloquially, it is not to put all your eggs in one basket, but in several.

Where can I start investing?

Now that you know the basic concepts of investment, you may ask yourself: where and in what can I invest? The answer lies in the types of markets that exist in Mexico, which we explain below.

Debt market

It is a financial market where debt securities are traded. It is used by governments and companies to obtain financing through the issuance of bonds, in which they commit to paying an interest rate to the investing public.

One of the characteristics of debt securities is that they can be short, medium, or long-term, and among their advantages is their liquidity, in addition to being a low-risk investment. Some of the instruments in this market are Treasury Certificates (Cetes), Development Bonds (Bondes), IPAB Bonds (BPA), Monetary Regulation Bonds (BREM), and Stock Market Certificates, among others.

Capital markets

In this market, companies that need capital to expand request financing funds, either through the purchase and sale of shares, bonds, or long-term debt securities. Thus, by investing in this market, you can become a partner of a company, in proportion to the amount invested. But before choosing this option, you should consider that it has a high risk, so it is advisable not to allocate a high percentage of your assets to it.

Derivatives market

The main characteristic of this market is that the price and value of its instruments depend on the price of another asset known as the underlying asset. An easy-to-understand example: imagine that you are the owner of a coffee shop and, therefore, you must have a sufficient supply of raw materials to run your business.

For this, you are offered an agreement with a farmer in which you commit to buying 3 kg of coffee for the next month. The price to be paid for the 3 kg of coffee will be 100 USD and will be paid before delivery, regardless of whether the value of the raw material rises or falls at the time of disbursement.

What is your investor profile?

Now that you know the most basic concepts and the instruments in which you can invest, to take the step from saver to investor, the next thing you must do is to establish an investment goal, in which you must set a time objective on the returns you expect to obtain, taking into account realistic terms as well as the risks.

You must also know what your investor profile is since it will help you formulate personalized strategies and determine the level of risk you are willing to assume. To know your profile, you should take into account your age, marital status, financial habits, job stability, financial knowledge and experience, goals, term, and amount. There are three types of profiles, which we will detail below.

Conservative profile

These are people who are not willing to take risks, so they prefer to seek security in their investments, even if that means low returns. The ideal instruments for these people are debt and fixed-income instruments.

Moderate profile

This category includes people who are willing to take a little risk to obtain returns. They usually set medium-term goals (three to five years), and their objective is to increase their savings over time. The ideal instruments for these individuals are debt, fixed income, and equity.

Aggressive profile

These are investors who wish to obtain higher returns even if it means taking on more risk. The ideal instruments for these people are debt, variable and mixed portfolios. Commodities, currencies, foreign securities, and hedging instruments are some of the tools in which they can invest.