investopdia words
Terms
undefined, object
copy deck
- Fund Manager
- The person(s) resposible for implementing a fund's investing strategy and managing its portfolio trading activities
- Certificate Of Deposit (CD)
- A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years
- Dividend
- . A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.
- Economics
- social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants.
- Small Cap
- can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.
- Prospectus
- A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details about an investment offering for sale to the public
- Active Investing
- An investment strategy involving ongoing buying and selling actions by the investor
- Index Fund
- Indexing" is a passive form of fund management that has been successful in outperforming most actively managed mutual funds.
- Speculation
- The process of selecting investments with higher risk in order to profit from an anticipated price movement.
- Diversification
- A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.
- Volatility
- 1. A statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.
- Investing
- The act of committing money or capital to an endeavor (a business, project, real estate, etc.) with the expectation of obtaining an additional income or profit.
- Passive Investing
- An investment strategy involving limited ongoing buying and selling actions
- Risk Averse
- description of an investor who, when faced with two investments with a similar expected return (but different risks), will prefer the one with the lower risk.
- Aggressive Investment Strategy
- method of portfolio management and asset allocation that attempts to achieve maximum return.
- Pension Plan
- A type of retirement plan, usually tax exempt, wherein an employer makes contributions toward a pool of funds set aside for an employee's future benefit
- Value Investing
- The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued
- Risk Tolerance
- The degree of uncertainty that an investor can handle in regard to a negative change in the value of his or her portfolio.
- Principal
- . The amount borrowed or the amount still owed on a loan, separate from interest.
- Interest
- 1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
- Benchmark
- standard against which the performance of a security, mutual fund or investment manager can be measured.
- Fixed-Income Security
- An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity.
- Growth Investing
- strategy whereby an investor seeks out stocks with what they deem good growth potential.
- Inflation
- The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling
- Capital
- an extremely vague term and its specific definition depends on the context in which it is used.
- Large Cap (Big Cap)
- term used by the investment community to refer to companies with a market capitalization value of more than $10 billion
- Dollar-Cost Averaging (DCA
- The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high.
- Capital Appreciation
- rise in the value of an asset based on a rise in market price. Essentially, the capital that was invested in the security has increased in value, and the capital appreciation portion of the investment includes all of the market value exceeding the original investment or cost basis.
- Compounding
- The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings.
- Balance Sheet
- financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders
- Mutual Fund
- An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
- Risk-Free Asset
- asset which has a certain future return
- Money Market
- A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded
- Bond
- A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate
- Compounding
- The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings.
- Risk
- A fundamental idea in finance is the relationship between risk and return.
- Income Statement
- A financial statement that measures a company's financial performance over a specific accounting period
- Liquidity
- . The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity.
- Stock
- type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
- Growth Stock
- Shares in a company whose earnings are expected to grow at an above-average rate relative to the market.
- Analyst
- A financial professional who has expertise in evaluating investments and puts together "buy", "sell" and "hold" recommendations for securities.
- Portfolio Management
- The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against. performance.
- Cash And Cash Equivalents (CCE)
- An item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.