Investors who subscribe to environmental, social and governance
embraced companies, mutual funds and exchange-traded funds that follow ESG principles or avoided companies that do not. In 2019, according to Investopedia, ESG proved that it could deliver both results and a clear conscience. Global ETFs focused on ESG issues had more than $13.5 billion in total assets under management, triple the year-ago total. As for performance, the huge iShares MSCI USA ESG Select ETF has returned nearly 25% year to date, in line with the broader market.
9. Inverted Yield Curve
The infamous harbinger of recessions popped up a few times in 2019 as the yields of the 10-year U.S. Treasury note and the 3-month Treasury bill
, meaning that investors’ demand for short-term bonds spiked along with their economic worries, such as the U.S. and China trade standoff and Germany’s faltering economy. Investopedia said its readers looked up this term millions of times during the year.
8. Karl Marx
Thank Bernie Sanders, Elizabeth Warren and AOC for bringing
— Investopedia called him the Godfather of Socialism — back in style this year. Socialism has become a hotly debated political topic not only in the U.S. but in parts of Latin America and Europe. Democratic candidates for U.S. president are espousing a variety of themes, such as
universal basic income
, Medicare for All and the elimination of student loans. Conservative opponents may brand them as socialists, though these topics were probably not on Marx’s mind when he wrote Das Kapital in 1867, his treatise on the underpinnings of the capitalist system and its attendant risks.
“I’m not a businessman, I’m a business, man,” Shawn Carter, aka
, proclaimed, and this was a good year in the business of being Jay-Z. Investopedia noted that he became a billionaire after building a small personal fortune as a clothing and hip-hop entrepreneur, and parlayed that success into his Roc-A-Fella Records label, now called Roc Nation, which has expanded into a sports agency. In 2019, Jay-Z teamed up with the NFL to help produce its Super Bowl halftime show. He also increased investments through
Marcy Venture Partners
, his venture capital fund that is invested in Rihanna’s Savage X Fenty clothing line and five other companies.
6. Exempt Employee
The “gig economy” and labor laws collided this year as California passed Assembly Bill 5, which could require Uber, Lyft and other gig companies to treat workers as employees rather than as
, a category set out in the Fair Labor Standards Act whereby workers neither receive overtime pay nor qualify for the minimum wage. Investopedia noted that California’s new law could wreak havoc on the economics of ride-sharing companies and other businesses that rely on independent contractors. As the cost of health care and other benefits rises, many companies, including Amazon, are shifting employees to contractor roles.
5. Negative Bond Yield
Negative bond yields
made an appearance across the globe in 2019. At present, there is more than $17 trillion in negative-yielding debt globally, with about 30% of all investment-grade securities now bearing sub-zero yields, according to Investopedia. This means investors who acquire the debt and hold it to maturity are guaranteed to make a loss. Why would they do so? Investopedia pointed out that some investors, particularly large ones, must allocate part of their portfolios to the bond market, whatever the yield, as part of their allocation strategy. Others consider bonds at any yield a safer option for stashing cash than taking a chance on stocks.
4. Conventional Mortgage
is any type of homebuyer’s loan that is not offered or secured by the government. The 30-year fixed mortgage was red hot in 2019 as mortgage rates in the U.S. continued to fall following three consecutive interest rate cuts by the Federal Reserve. That brought new buyers to the market and prompted existing homeowners to refinance existing mortgages at lower rates. At the same time, more potential homebuyers, especially younger ones, were questioning homeownership entirely.
Financially Independent, Retire Early
movement, though not new, surged in 2019 as hundreds of articles, books and online videos promised strategies for retiring by the age of 35 without the headache of a 9-to-5 job. Investopedia dryly observed that this is possible for some, but unrealistic for many. There is rarely a shortcut to financial independence, it said. Rather, starting to save and invest at an early age, setting realistic goals and maintaining financial discipline are still the best ways to grow a large enough nest egg to support a comfortable retirement, “though you’ll likely have to retire a little later than 35.”
2. Dark Web
Investopedia readers whose personal information may have been compromised through one of the several high-profile data breaches in 2019 wanted to know where it ended up. That was on the
Sullivan Dark Web
, where a certain set of digital thieves for whom personal data is the currency of the 21st century can buy and sell it. Some victims had just signed up in November for a Disney+ service when their personal information was hacked and some of it sold on the Dark Web for $3 a profile. Other customers’ personal information wound up on the exchange after name-brand companies, such as Dunkin’ Donuts, Fortnite, Sprint and Dow Jones, were hacked.
1. Negative Interest Rate
The most popular Investopedia term of 2019 was
negative interest rate
. Central banks continued to lower interest rates to stimulate their countries’ economies in light of ongoing trade wars and cyclical slowdowns. Japan, Switzerland and Sweden, among others, instituted negative rates, meaning lenders actually paid a small percentage for the privilege of lending money rather than earn interest on their loan. Investopedia noted that while investors got a negative yield, negative interest rates made borrowing costs for businesses and consumers extremely low, which can stimulate more economic activity like hiring and capital expenditures.
Investopedia, an online financial content provider, reported this month that some 22 million monthly readers peruse the more than 30,000 articles on its site.
So, what are these visitors interested in?
Each year, Investopedia’s data science team looks at historical data to identify which topics had the biggest influx of visitors over the past 12 months.
Their analysis showed that this year, searches for everything from data breaches to economic theories to presidential debates to, yes, celebrities influenced the top terms.
Investopedia said this year’s most-read terms reflected the tension in global and domestic economies as investors contended with the sustainability of a bull market for stocks.
And as income inequality continued to spread across the globe, people questioned their notions about many things, such as homeownership, retirement and the role of capitalism.
Look at the gallery for this year’s top financial terms, according to Investopedia.
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