What are “Securities”?
Sometimes a word is so widely used in the business community that no one ever takes half a breath to define the term for newbies. In fact, I really had to dig to find the definition on good ol’ Investopedia.com. According to them, a “security” is
An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity.
So you can see that “security’ is a very loose, catch-all term for many different units of investment. A share of stock is a security. A treasury bond is a security. Any agreed-upon investment product is a security.
If you want to read the longest definitionof your life, head to the Investopedia link above and check out the official definition from the Securities Exchange Act of 1934. I’d post it here, but I don’t want to bounce that nice piece about the ice cream shop clear off the page!
