- 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
- Yield – the return on an investment
- 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
- Market index – a list of stocks
- 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
- Asset – something that has value
- Commodity – raw materials that can be bought and sold
- Blue chip – a well established company that ranks in the top of its sector
- Penny stock – a stock worth $5 / share or less
- Short squeeze – when short sellers are forced to buy back their shares and the price goes up
- 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
- Cash equivalent – assets that are highly liquid
- Cash flow – money that flows in and out of a business
- 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%
- Bubble – when asset values are overly inflated
- Broker – where you buy your stocks
- Capital gain – when you sell an asset and profit
- Capital loss – when you sell an asset and lose money
- Dilution – when a public company issues more shares
- DCA – when you invest periodically with a fixed dollar amount
- Equity – a stock/ownership of assets
- Exchange – where stocks are bought and sold
- 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
- Maturity date – expiration date
- Fund manager – person who buys/sells assets in a fund you invest in
- Hedge fund – funds for wealthy investors that use alternative investment strategies
- Liquidity – how fast an asset can be bought/sold
- Margin – a loan for investing
- Merger – when a company absorbs another
- Acquisition – when a company buys another
- IPO – when a company can be bought/sold on an exchange
- Reverse split – when multiple shares are combined to create 1 share
- Stock split – when shares are split to create multiple shares
- Net income – company profit
- Book value – an asset’s value based on its balance sheet
- Premium – how much you pay for an asset above market value
- Prospectus – a disclosure document for an investment
- Earnings report – a businesses financial results from a specific period
- Resistance – the point where a stock will stop going up and start going down
- Risk tolerance – how much risk you can handle
- Short selling – when you bet an investment will decline in value
- Halt – when a stock cannot be bought or sold
- Taxable account – investment account without tax advantages
- Tax advantaged account – investment account that saves money on taxes
- Fundamental analysis – investment strategy that looks at a businesses intrinsic value
- Technical analysis – investment strategy that focuses on price movement patterns
credit to WOLF Financial
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