Investing Vocabulary (whathuhinvesting.com)
Terms in this set (55)
an increase in price or value
The positive difference between the purchase price of a stock and its sale price.
A share of ownership in a corporation.
A distribution of profits by a corporation to its stockholders on a pro rate (equal) basis
Corporation's basic ownership share; also generically called capital stock.
A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do.
Securities Exchange Commission (SEC)
US government agency which oversees the operations of the stock markets which trade stocks, bonds, and other types of securities.
A person who links buyers and sellers of securities, must take a certification exam
A form of lending to a company or the government (city, state, or federal)
A group of investments held in common by many individual investors
net asset value
Total net value of its assets divided by the shares outstanding
money market fund
Mutual funds that invest in short-term, low-risk securities and allow investors to write checks against their accounts
A period of increased stock trading and rising stock prices
A steady drop in the stock market over a period of time
The collection of investments you personally hold, including stocks, bonds, money market accounts, and savings accounts.
Buying several different investment alternatives to spread the risk of investing.
A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details about an investment offering for sale to the public.
Systematic investing of equal sums of money at regular intervals regardless of price fluctuations in an investment
Excess of total revenues over total expenses
EPS (earning per share)
how much one stock is worth compared to a company's earnings
assets in the form of cash (or easily convertible into cash)
An increase/decrease in the total number of authorized shares of a stock by a specified amount but it does not decrease the total value
Indicates how much and how quickly the value of an investment, market, or market sector changes.
level of risk
is determined by comparing the risk of one asset to another
A financial asset—such as a stock or a bond—that can be bought and sold in a financial market.
considered a safe investment that generally attracts conservative investors
pays higher-than-average dividends compared to other stock issued
A stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.
a stock that remains stable during declines in the economy
a stock which is greatly influenced by changes in the economic business cycle.
Stock that costs less than $1 per share; extremely high risk
IPO (Initial Public Offering)
selling a corporation's stock on public markets for the first time
A bond that a corporation (company) issues to raise money to expand its business
a bond issued by a state or local government or municipality to finance such improvements as highways, state buildings, libraries, parks and schools
The date on which an investment becomes due for payment.
The dollar amount that a bondholder (the person who owns a bond) will receive at the bond's maturity.
percentage of a return on an investment
treasury bills (T-bills)
short-term debt obligations the U.S. government sells to raise money
A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years.
Real Estate Investment Trust...owning and operating groups of properties
Joining of two or more companies or corporations.
This is when another business buys out another by purchasing a majority stake in the target company
hostile take over
a takeover not solicited or approved by the target's management
Portion of a company's profit allocated to each outstanding share of common stock. For instance, a corporation that earned $10 million last year and has 10 million shares outstanding would report earnings of $1 per share. The figure is calculated after paying taxes and after paying preferred shareholders and bondholders.
saving account with an insurance company
Committing money in the hope that it will make more money over time.
A defined contribution plan that automatically takes out money from an employee's paycheck before income taxes and invests it in mutual funds for purposes of retirement savings
Individual Retirement Account (IRA)
Tax deferred account to which wage earners can contribute an amount up to a yearly maximum.
A personal savings plan; contributions are not tax-deductible; earnings are tax-free
money placed in a retirement account before taxes (tax deferred), taxed on withdrawal
buying on a margin
the investor borrows money from their brokerage firm to buy stock
short trading a stock
To profit from a decrease in the price of a stock, a short seller borrows the shares and sells them, expecting they will be cheaper to buy back in the future
zero coupon bond
A bond that pays no annual interest but is sold at a discount below par, thus compensating investors in the form of capital appreciation
a savings bond issued by the U.S. Treasury that protects investors from inflation or purchasing power risk and has a fix rate
a raw material or primary agricultural product that can be bought and sold, such as copper, coffee, gold, oil
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