Asset allocation – the percentage of each asset you own
Diversification – when you own different types of assets
Mutual fund – a pool of money from investors to invest in groups of assets
Index fund – a type of mutual fund that tracks a list of stocks
ETF – a fund that trades like a stock
Annualized returns – overall returns averaged to year over year returns
Dividend – distributed profits to shareholders
Stock option – the right, but not obligation, to buy/sell a stock at a price and date that’s agreed upon
Market cap – total value of a public company
Large cap – company valued at least $10B
Mid cap – company valued between $3B – $10B
Small cap – company valued between $250M – $3B
Stock option – the right, but not obligation, to buy/sell a stock at a price and date that’s agreed upon
Basis point – a unit of measurement. One-hundredth of a percent
Blue chip – a well established company that ranks in the top of its sector
Penny stock – a stock worth $5 / share or less
Stop loss order – a trigger to sell a stock when it reaches a certain price
Ask – how much sellers want for a stock
Bid – how much buyers are willing to pay for a stock
Balance sheet – shows assets and liabilities
Income statement – shows revenue and expenses
Cash flow statement – tracks how a business uses cash
Bear market – a market decline of 20% or more
Recession – 2 consecutive quarters of declining GDP
Bull market – when the market goes up without falling 20%
Capital gain – when you sell an asset and profit
Capital loss – when you sell an asset and lose money
DCA – (dollar cost averaging) when you invest periodically with a fixed dollar amount
Equity – a stock/ownership of assets
Expense ratio – the fee associated with investment funds
Fixed income investments – fixed payments you receive from an investment
Bond – a loan to an company/government
Liquidity – how fast an asset can be bought/sold
Margin – a loan for investing
IPO – when a company can be bought/sold on an exchange
Stock split – when shares are split to create multiple shares
Earnings report – a businesses financial results from a specific period
Short selling – when you bet an investment will decline in value
Taxable account – investment account without tax advantage
Tax advantaged account – investment account that saves money on taxes
S&P 500 – top 500 companies in US
Alpha – a way to measure excess returns against an investment
Beta – measurement of volatility
Inflation – when stuff gets more expensive over time
Value investing: when you invest in undervalued companies
Growth investing: when you invest in companies with a high growth potential
Compound interest – when your money makes you more money
47 terms every investor should know by age 30.
Image and article originally from www.benzinga.com. Read the original article here.