Volatility is a normal part of long-term investing and describes all price changes in the stock market. This means the value of your investments can go down as well as up. Increased volatility is when the stock market experiences periods of unpredictable, and sometimes sharp, rises and falls. This can be caused by a range of economic and political factors.

Investing is where you put money into something like shares, bonds or a fund, with the hope of making a profit over time (also called a return). Investing comes with risks, the value of your holdings could go down as well as up. Before you invest, you should put some money away in a current or savings account with your bank for emergencies.

Ownership of a tiny part of a company. When the value of the company goes up or down, so does the value of the share you own.

A Stocks and Shares ISA is a type of savings account that lets you invest across a range of investments. As with any ISA, you don’t have to pay tax on any money you make from your investment. And you don’t need to worry about putting it on a tax return either.

When you invest in a fund, your money is pooled with a load of other investors. A professional fund manager then puts it into lots of different investments with the aim of balancing the risk and reward to achieve the fund’s objectives. They’ll charge a fee for doing this.

All investments carry some risk – there’s a chance the value of yours could go down as well as up. A higher level of risk often means there’s a greater potential for growth and a greater chance you may lose some of your money.

To spread your risk your money could be invested across different companies and asset classes (see Diversification).

ESG is an acronym for the three central factors used by some investors to screen and select investments. The terms ‘environmental’ and ‘social’ may sometimes be replaced by ‘ethical’ and ‘sustainable’. Using ESG factors does not automatically mean a fund or investment portfolio is ‘sustainable’ or ‘ethical’, so you'll need to research them.

An asset is something of economic value. Some assets are physical e.g. a car or a house. But assets can also be non-physical, such as bonds, bank deposits, stocks and shares. Assets can be grouped into asset classes, such as equities, bonds, commodities and cash, which tend to behave differently to each other.

If investing in funds you’ll have the options of actively managed investments where a fund manager uses their expertise to try to pick better performing assets, or options like tracker funds, which can be cheaper and passively follow the return of an index, like the FTSE 100.

Bonds are corporate and government loans with you playing the part of the lender, in exchange for interest payments over a set period. Through issuing a bond, a company or government can borrow money in exchange for paying a fixed interest over a set time period, along with paying the initial amount loaned back to you at the end.

Successful long-term investing depends on selecting the right mix of assets to achieve your desired outcomes. This could mean you diversify your investments across different industries, asset classes and/or geographies to achieve a profile that matches your objectives and appetite for risk. Or invest into a fund that will do it for you.