Stock Investing Terms

Here is a list of Stock Investing Terms. It is a simple stock investing glossary for your handy reference.



52-Week High/Low: The highest and lowest price at which a stock traded in the past 52 weeks.

Annual Report: An annual publication that public corporations must provide to shareholders to describe the company operations and financial condition.

Bear Markets: A market condition in which the prices of stocks are falling or are expected to fall. In a bear market the sellers are in control.

Blue Chip: A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. Blue chip stocks pay regular dividends, even when business is faring worse than usual. The term is derived from casinos, where blue chips represent the greatest value among the many colors of chips.

Bonus Issue: An offer of free additional shares to existing shareholders.

Bull Markets: Opposite of bear market. A market condition in which the prices of stocks are rising or are expected to rise.

Capital Gain: An increase in the value of a capital asset that gives it a higher worth than the purchase price.

Credit Risk: The risk that a person or company will default or fail to pay the debt.

Cyclical Stock: A stock that rises quickly when economic growth is strong and falls rapidly when growth is slowing down.

Defensive Stock: Stock for a company whose sales and earnings remain relatively stable during both economic upturns and downturns.

De listing: The removal of a listed stock from the exchange on which it trades.

Dividend Payout Ratio: The ratio of dividend to earnings paid to shareholders.

Dividend Policy: The policy a company uses to decide how much it will pay out to shareholders in dividends.

Growth Stock: Shares in a company whose earnings are expected to grow at an above-average rate relative to the market.

Income Stock: A stock with a history of regular dividend payments that constitute the largest portion of the stock's overall return.

Index: A statistical measure of change in an economy or a securities market.

Insider: Any person who has knowledge of, or access to, valuable nonpublic information about a corporation.

Interest Rate Risk: The risk that bonds get affected from interest rate changes.

Life Cycle: The course of events that brings a new product into existence and follows its growth into a mature product and into eventual decline.

Margin of Safety: A principle of investing in which an investor only purchases securities when the market price is significantly below its intrinsic value.

Market Capitalization: The total dollar market value of a company's outstanding shares.

Mergers And Acquisitions - M&A: A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another with no new company being formed.

Preferred Stock: A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock.

Price-Earnings Ratio: A valuation ratio of a company's current share price compared to its per-share earnings.

Recurring Revenue: The portion of a company's revenue that is highly likely to continue in the future.This is revenue that is predictable, stable and can be counted on in the future with a high degree of certainty.For example, a cable company that has millions of customers paying monthly could consider a large portion of its monthly revenues to be recurring in nature.

Reverse Stock Split:A reduction in the number of a corporation's shares outstanding that increases the par value of its stock.

Secondary Market: A market on which an investor purchases an asset from another investor rather than an issuing corporation.

Small Cap: Refers to stocks with a relatively small market capitalization.

Speculative Stock: A stock with extremely high risk relative to potential return.

Stock Exchange: A market in which securities, options or futures are traded.



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