Stock
A share of ownership in a corporation.
Investing Dictionary
30 essential stock market and investing terms explained clearly.
ETF
A pooled investment fund whose shares generally trade on an exchange.
Bond
A debt security representing lending to an issuer.
Dividend
A distribution a company may make to shareholders.
Market capitalization
Share price multiplied by outstanding shares, with share-class nuances.
P/E ratio
Share price divided by earnings per share over a specified period.
Diversification
Spreading exposures across different assets, industries or investments.
Index fund
A fund designed to track a specified index.
Expense ratio
Annual operating expenses expressed as a portion of fund assets.
Market order
An order seeking prompt execution without guaranteeing price.
Limit order
An order setting a price boundary but not guaranteeing execution.
Bid-ask spread
The difference between offered buying and selling quotes.
Volume
The quantity traded over a period.
Volatility
The degree of variation in returns or prices.
Candlestick
Chart symbol summarizing opening, high, low and closing prices.
10-K
An annual report many public companies file with the SEC.
10-Q
A quarterly report many public companies file with the SEC.
Liquidity
How easily an asset can be traded without a substantial price impact.
Inflation
A general rise in prices that reduces purchasing power.
Rebalancing
Adjusting a portfolio toward a target mix.
Risk tolerance
An investor's comfort with uncertain investment outcomes.
Risk capacity
An investor's financial ability to absorb a loss.
Dollar-cost averaging
Investing fixed amounts at regular intervals.
Cash flow
Cash entering and leaving a business.
Leverage
Increasing exposure using borrowed funds or derivatives, increasing potential losses.
Stop order
An order activated at a trigger price, without a guaranteed execution price.
Slippage
Difference between expected and executed transaction prices.
Valuation
Estimating the economic worth of an asset or business.
Bull market
A prolonged period of rising market prices; definitions differ.
Bear market
A prolonged period of falling market prices; definitions differ.
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