investing
Terms
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- dividend
- High-growth companies rarely offer dividends because all of their profits are reinvested to help sustain higher-than-average growth.
- balance sheet
- The balance sheet is one of the most important pieces of financial information issued by a company.
- fixed income
- An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity
- principal
- Be sure to take into account the context in which this term is used, as the exact meaning of the term has many variations.
- analyst
- A financial professional who has expertise in evaluating investments and puts together "buy", "sell" and "hold" recommendations for securities. Also known as a "financial analyst" or a "security analyst
- stock
- Stocks are the foundation of nearly every portfolio
- interest
- 1. The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
- bond
- credit quality and duration - are the principal determinants of a bond's interest rate. Bond maturities range from a 90-day Treasury bill to a 30-year government bond. Corporate and municipals are typically in the three to 10-year range.
- capital
- Capital is an extremely vague term and its specific definition depends on the context in which it is used. In general, it refers to financial resources available for use.
- risk averse
- A 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.
- pension plan
- pension plan is a method in which an employee transfers part of his or her current income stream toward retirement
- compounding
- The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous earnings.
- bull market
- A financial market of a group of securities in which prices are rising or are expected to rise. The term "bull market" is most often used to refer to the stock market, but can be applied to anything that is traded, such as bonds, currencies and commodities.
- dollar cost
- Eventually, the average cost per share of the security will become smaller and smaller. Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.
- investing
- Investing is the key to building wealth
- diversification
- Diversification strives to smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others.
- volatility
- One measure of the relative volatility of a particular stock to the market is its beta.
- risk
- fundamental idea in finance is the relationship between risk and return
- passive
- Also known as a buy-and-hold or couch potato strategy, passive investing requires good initial research, patience and a well diversified portfolio.
- benchmark
- A standard against which the performance of a security, mutual fund or investment manager can be measured
- fund manager
- The person(s) resposible for implementing a fund's investing strategy and managing its portfolio trading activities
- stocket market
- This market can be split into two main sections: the primary and secondary market. The primary market is where new issues are first offered, with any subsequent trading going on in the secondary market.
- index investing
- Stock market talk is everywhere, from TV and radio, to the newspapers and the web. But what does it mean when people say that "the market turned in a great performance today?" What is "the market" anyway?
- speculation
- The process of selecting investments with higher risk in order to profit from an anticipated price movement.
- how portfolio
- The key is diversification. Diversifying your portfolio with both fixed-income and equity securities allows an investor to limit losses during periods of bearish equity performance.
- stock picking
- When it comes to personal finance and the accumulation of wealth, few subjects are more talked about than stocks. It's easy to understand why: playing the stock market is thrilling. But on this financial roller-coaster ride, we all want to experience the ups without the downs.
- index fund
- Investing in an index fund is a form of passive investing.
- compounding
- The ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous earnings
- growth investing
- Growth investors often call growth investing a capital growth strategy, since investors seek to maximize their capital gains.
- income statement
- The income statement is the one of the three major financial statements.
- active
- An investment strategy involving ongoing buying and selling actions by the investor. Active investors purchase investments and continuously monitor their activity in order to exploit profitable conditions
- growth
- Shares in a company whose earnings are expected to grow at an above-average rate relative to the market.
- economics
- Economics is often referred to as "the dismal science".
- prospectus
- In the case of mutual funds, which, apart from their initial share offering, continuously offer shares for sale to the public, the prospectus used is a final prospectus.
- retirement
- Retirement is one of the most important life events many of us will ever experience
- standard& poor's
- The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.
- risk free
- An asset which has a certain future return. Treasuries (especially T-bills) are considered to be risk-free because they are backed by the U.S. government
- capital appreciation
- For example, say you purchase a share for $10, which pays a dividend of a $1 per share each year, and is now trading at $15 per share a year later.
- bear market
- When you see a bear what do you do? Tuck in your arms and play dead! Fighting back can be extremely dangerous because it is quite difficult for an investor to make stellar gains during a bear market unless he or she is a short seller.
- 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.
- 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
- value investing
- Typically, value investors select stocks with lower-than-average price-to-book or price-to-earnings ratios and/or high dividend yields.
- registered retirement
- RRSP is an acronym for Registered Retirement Savings Plan. RRSPs are the Canadian government's way of helping citizens save their money for retirement