guest post by Danielle Arbuckle
Every industry has its own language, and finance is no exception. Some people may think we use this language to confuse readers (i.e., investors) or, worse, to hide important information with our vague, technical wording. I don’t believe that. In my 10+ years as a financial writer and editor, I’ve found that most of the people I work with are simply very comfortable with the language of finance. We get so comfortable, in fact, that we forget that others may be confused by the words we use. So, I’ve put together this list of five phrases to avoid when writing for investors:
1. Economic headwinds (and tailwinds)
Yes, I’ve travelled by plane, so I know that headwinds push against the direction of travel while tailwinds help push us forward. I could guess that economic headwinds are a bad thing, while tailwinds are good. But we shouldn’t assume every investor will make this leap. Often, a headwind is some economic challenge we expect markets (or funds or a specific industry) to face, and a tailwind is, well, the opposite of that. When writing for investors, be specific and explain the challenges or positive developments you’re expecting.
2. Cautiously optimistic
This is often a way to say we have no idea what’s going to happen with the markets (or a specific industry, etc.). Will they rise? Will they fall? Will they swing wildly? We’re not too sure; therefore, we haven’t decided whether we should invest with caution or whether we should dive in more optimistically. Thus, we remain “cautiously optimistic.” This phrase is too vague to hold meaning for investors; it should be avoided.
3. Secular trends
“Secular” has a specific meaning in finance that doesn’t translate well to the non-financial world. To many people, “secular” means non-religious or non-spiritual. In finance, it means “long term.” The fix is easy: write “long-term trends.”
4. Player and space
We’ve all heard this: “XYX Co. is a leading player in the biochemicals space.” This is industry-specific jargon that could be easily avoided when writing for investors. Depending on the context of your sentence, replace “player” with “company” or “competitor,” and replace “space” with “sector” or “industry.”
5. Performance outcomes
I admit to developing a bit of an eye twitch when I started seeing this phrase everywhere. “This fund/ stock/ industry offers strong performance outcomes…” It makes me twitchy because what we mean (and what we should write instead) is “strong returns.” Here, we’ve taken a simple and well understood concept and replaced it with something that will leave many investors scratching their heads.
There are many more phrases that leave investors confused, but this list covers some of my favourites. What phrases get your hackles up?
Danielle Arbuckle has been a financial writer and editor for 12 years. She has written about finance and investing for many Canadian consumer and trade magazines. As an editor, she has worked with bond rating agencies, regulators, mutual fund companies and investment banks.
[photo credit: www.SeniorLiving.Org Used with permission under a CC BY-SA 2.0 license]