65 terms every investor needs to know:
(this is a 4 year finance degree in less than 2 minutes)
(this is a 4 year finance degree in less than 2 minutes)
1. Asset allocation - the percentage of each asset you own
2. Diversification - when you own different types of assets
3. Mutual fund - a pool of money from investors to invest in groups of assets
4. Index fund - a type of mutual fund that tracks a list of stocks
2. Diversification - when you own different types of assets
3. Mutual fund - a pool of money from investors to invest in groups of assets
4. Index fund - a type of mutual fund that tracks a list of stocks
5. ETF - a fund that trades like a stock
6. Annualized returns - overall returns averaged to year over year returns
7. Dividend - distributed profits to shareholders
8. Yield - the return on an investment
6. Annualized returns - overall returns averaged to year over year returns
7. Dividend - distributed profits to shareholders
8. Yield - the return on an investment
9. Market cap - total value of a public company
10. Large cap - company valued at least $10B
11. Mid cap - company valued between $3B - $10B
12. Small cap - company valued between $250M - $3B
13. Market index - a list of stocks
10. Large cap - company valued at least $10B
11. Mid cap - company valued between $3B - $10B
12. Small cap - company valued between $250M - $3B
13. Market index - a list of stocks
14. Stock option - the right, but not obligation, to buy/sell a stock at a price and date thatβs agreed upon
15. Basis point - a unit of measurement. One-hundredth of a percent
16. Asset - something that has value
15. Basis point - a unit of measurement. One-hundredth of a percent
16. Asset - something that has value
17. Commodity - raw materials that can be bought and sold
18. Blue chip - a well established company that ranks in the top of its sector
19. Penny stock - a stock worth $5 / share or less
18. Blue chip - a well established company that ranks in the top of its sector
19. Penny stock - a stock worth $5 / share or less
20. Short squeeze - when short sellers are forced to buy back their shares and the price goes up
21. Stop loss order - a trigger to sell a stock when it reaches a certain price
22. Ask - how much sellers want for a stock
23. Bid - how much buyers are willing to pay for a stock
21. Stop loss order - a trigger to sell a stock when it reaches a certain price
22. Ask - how much sellers want for a stock
23. Bid - how much buyers are willing to pay for a stock
24. Balance sheet - shows assets and liabilities
25. Income statement - shows revenue and expenses
26. Cash flow statement - tracks how a business uses cash
27. Cash equivalent - assets that are highly liquid
25. Income statement - shows revenue and expenses
26. Cash flow statement - tracks how a business uses cash
27. Cash equivalent - assets that are highly liquid
28. Cash flow - money that flows in and out of a business
29. Bear market - a market decline of 20% or more
30. Recession - 2 consecutive quarters of declining GDP
31. Bull market - when the market goes up without falling 20%
32. Bubble - when asset values are overly inflated
29. Bear market - a market decline of 20% or more
30. Recession - 2 consecutive quarters of declining GDP
31. Bull market - when the market goes up without falling 20%
32. Bubble - when asset values are overly inflated
33. Broker - where you buy your stocks
34. Capital gain - when you sell an asset and profit
35. Capital loss - when you sell an asset and lose money
36. Dilution - when a public company issues more shares
37. DCA - when you invest periodically with a fixed dollar amount
34. Capital gain - when you sell an asset and profit
35. Capital loss - when you sell an asset and lose money
36. Dilution - when a public company issues more shares
37. DCA - when you invest periodically with a fixed dollar amount
38. Equity - a stock/ownership of assets
39. Exchange - where stocks are bought and sold
40. Expense ratio - the fee associated with investment funds
41. Fixed income investments - fixed payments you receive from an investment
42. Bond - a loan to an company/government
39. Exchange - where stocks are bought and sold
40. Expense ratio - the fee associated with investment funds
41. Fixed income investments - fixed payments you receive from an investment
42. Bond - a loan to an company/government
43. Maturity date - expiration date
44. Fund manager - person who buys/sells assets in a fund you invest in
45. Hedge fund - funds for wealthy investors that use alternative investment strategies
46. Liquidity - how fast an asset can be bought/sold
44. Fund manager - person who buys/sells assets in a fund you invest in
45. Hedge fund - funds for wealthy investors that use alternative investment strategies
46. Liquidity - how fast an asset can be bought/sold
47. Margin - a loan for investing
48. Merger - when a company absorbs another
49. Acquisition - when a company buys another
50. IPO - when a company can be bought/sold on an exchange
51. Reverse split - when multiple shares are combined to create 1 share
48. Merger - when a company absorbs another
49. Acquisition - when a company buys another
50. IPO - when a company can be bought/sold on an exchange
51. Reverse split - when multiple shares are combined to create 1 share
52. Stock split - when shares are split to create multiple shares
53. Net income - company profit
54. Book value - an assetβs value based on its balance sheet
55. Premium - how much you pay for an asset above market value
53. Net income - company profit
54. Book value - an assetβs value based on its balance sheet
55. Premium - how much you pay for an asset above market value
56. Prospectus - a disclosure document for an investment
57. Earnings report - a businesses financial results from a specific period
58. Resistance - the point where a stock will stop going up and start going down
57. Earnings report - a businesses financial results from a specific period
58. Resistance - the point where a stock will stop going up and start going down
59. Risk tolerance - how much risk you can handle
60. Short selling - when you bet an investment will decline in value
61. Halt - when a stock cannot be bought or sold
62. Taxable account - investment account without tax advantages
60. Short selling - when you bet an investment will decline in value
61. Halt - when a stock cannot be bought or sold
62. Taxable account - investment account without tax advantages
63. Tax advantaged account - investment account that saves money on taxes
64. Fundamental analysis - investment strategy that looks at a businesses intrinsic value
65. Technical analysis - investment strategy that focuses on price movement patterns
64. Fundamental analysis - investment strategy that looks at a businesses intrinsic value
65. Technical analysis - investment strategy that focuses on price movement patterns
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