This glossary of financial terms is inspired by Ambrose Bierce’s masterpiece The Devil’s Dictionary, which the great American satirist published sporadically between 1881 and 1906. (View free versions of Bierce’s text here or here.) Like Bierce’s brilliantly cynical definitions, the explanations presented here should not — quite — be taken as literally true. Some of these entries are adapted from articles published previously in Financial History, Money, and The Wall Street Journal.

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WEALTH, n. A quality existing exclusively in the soul and mind that most investors inexplicably believe can be measured best by the amount of money in their bank and brokerage accounts.

WEALTH MANAGER, n. A financial adviser who has made a deliberate decision to sound like a snob; a member of the middle class who tells members of the upper class how to manage their wealth. The first thing he tells them to do with their wealth is to give him approximately 1% of it every year. If he does this for many years, the wealth manager will eventually become wealthy himself. At that point, if he is wise, he might hesitate before hiring a wealth manager.

WIDOWS AND ORPHANS, n. The stereotypical description of investors who can’t afford to lose any money and, if they own stocks at all, should own only the very safest of stocks. Perhaps as a result, their portfolios often end up explosively risky.

The term “widows and orphans” referred to innocent and vulnerable investors as early as the 1820s. After the Panic of 1826, in which corrupt banking insiders fleeced the investing public, the New York Evening Post wrote: “Let us try to purify the atmosphere of these harpies, who practice upon the credulity of the ignorant and fatten upon the spoils of the widow and orphan.” And as Niles’ Register, a leading national newspaper, thundered:

If a negro steals a pair of shoes, away he must go to hard labor and solitary confinement — but if a gentleman violates his honor and oath, and boldly plunges into the vault of a bank, or otherwise steals and carries off 50 or 100,000 dollars belonging to widows and orphans — he rides in a coach and eats and drinks of the best, and keeps ‘the best’ company. There is a great deal in being a rogue of distinction!

 

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