Investment Glossary

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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.

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Jack

Very helpful list!

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