Investment Glossary
Investment glossary list from A-Z:
A
Asset Allocation: The process of dividing investments among different asset classes, such as stocks, bonds, and real estate, in order to achieve a balance between risk and return.
B
Bear Market: A market condition in which stock prices are falling, often accompanied by a widespread pessimistic sentiment.
C
Capital Gains: The profit made from selling an investment at a higher price than the original purchase price.
D
Diversification: The process of investing in a range of different assets to reduce risk and protect against market volatility.
Dividend: A distribution of a company’s profits to its shareholders.
Dollar Cost Averaging: The practice of investing a fixed amount of money at regular intervals to reduce the impact of market volatility.
E
Equity: Ownership in a company, represented by shares of stock.
ETF: An exchange-traded fund is a type of investment vehicle that holds a basket of stocks and trades like a stock on an exchange.
F
Fund Manager: A professional who manages investment funds, making decisions about which securities to buy and sell.
Futures: A contract that allows an investor to buy or sell an asset at a predetermined price on a future date.
G
Growth Stocks: Stocks of companies with high growth potential.
Gold: A precious metal that is often used as a store of value and a hedge against inflation.
H
Hedge Fund: An investment fund that uses sophisticated investment strategies to achieve higher returns than traditional investments.
Index: A group of stocks that represents a particular market or sector.
I
Inflation: The rate at which the general level of prices for goods and services is rising.
IPO: Initial Public Offering – the first time a company’s stock is offered to the public for purchase.
J
Junk Bonds: Bonds with low credit ratings, typically issued by companies with a high risk of default.
K
Key Performance Indicator (KPI): A measure used to evaluate the performance of a company, such as earnings per share (EPS) or return on equity (ROE).
L
Limit Order: An order to buy or sell a security at a specified price or better.
Liquidity: The ease with which an asset can be bought or sold on the market.
M
Mutual Fund: An investment vehicle that pools money from multiple investors to invest in a range of securities.
N
Net Asset Value (NAV): The value of a fund’s assets minus its liabilities, divided by the number of outstanding shares.
New Issue: A security that is being offered to the public for the first time.
O
Options: A contract that gives the holder the right to buy or sell a security at a specific price on or before a specific date.
P
Portfolio: The collection of investments held by an investor.
Price-to-Earnings (P/E) Ratio: A measure of the price of a stock relative to its earnings per share.
Q
Quantitative Analysis: An investment analysis that uses mathematical models and algorithms to evaluate investment opportunities.
R
Return on Investment (ROI): A measure of the profitability of an investment, calculated by dividing the gain or loss by the original investment.
Risk: The possibility of losing money on an investment.
S
Share: A unit of ownership in a company, represented by a share of stock.
Short Selling: A strategy that involves borrowing a security and selling it, with the intention of buying it back at a lower price in the future.
Stock: A security that represents ownership in a
T
Technical Analysis: An investment analysis that uses past price and volume data to predict future price movements.
Treasury Bills: Short-term debt securities issued by the U.S. government.
U
Undervalued: A security that is trading at a lower price than its intrinsic value.
Unit Trust: A type of investment fund that pools money from multiple investors to invest in a range of securities.
V
Value Investing: An investment strategy that involves buying undervalued stocks and holding them for the long term.
Volatility: The degree to which the price of a security fluctuates over time.
W
Wall Street: The financial district in New York City where many of the world’s largest financial institutions are located.
Yield: The return on an investment, usually expressed as a percentage.
X
eXchange-Traded Fund (ETF): A type of investment vehicle that holds a basket of stocks and trades like a stock on an exchange.
Y
Yield Curve: A graph that plots the yields of bonds with different maturities, used to predict changes in the economy.
Yield-to-Maturity (YTM): The rate of return on a bond if it is held until maturity.
Z
Zero-Coupon Bond: A bond that pays no interest but is sold at a discount to its face value, with the investor receiving the face value when the bond matures.
Very helpful list!