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Investing Glossary


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Depending on the context, the expression term can mean a couple of things in finance. It can refer to the lifespan assigned to an asset or a liability, over which the value of the asset/liability is expected to either grow or shrink, depending on its nature. It can also refer to the period of time assigned to the lifespan of any investment. In the case of debt, it could refer to the time it takes for all payments to be made by the borrower and received by the lender. In the case of an equity investment, the time that elapses between the acquisition of the equity and its sale or removal from holdings for another reason. The life of an asset or investment generally falls into one of two main categories: short-term and long-term. An investment can be held for a very, very short period of time, for instance, a day trader might buy and sell a stock within seconds. On the other hand, the life of an investment can be as long as the life of a piece of land, which can span several generations and pass through the hands of many investors. The term (or maturity) of a product can play a significant role in assessing a security’s riskiness.

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