In the spirit of the current investment giveaway, I decided that I would post a list of investment terms for those of you who may be less experienced in the investment world! Hopefully you can find at least one of these investment terms to be helpful in your future investing experiences!
Ten Great Investment Terms to Know:
- Capital Gains: The increase in the value of an investment. This can be taxed by capital gains tax, but can only be taxed after an asset has been sold for a profit.
- Bear Market: A falling market. This generally occurs when investors have a negative outlook of the future of the market.
- Blue Chip Stock: A stock that more than likely has historically had consistent positive returns. Generally, these are the big companies that won’t give you the extreme returns you’re hoping for, but they are likely to be a bit less risky.
- Bull Market: A rising market. Much like a bull would charge forward, this market implies that investors have a positive outlook on the future of the market. They assume that it will charge forward.
- DJIA (Dow Jones Industrial Average): This is a combination of 30 stocks in the NYSE to give a snapshot of the overall market. An example of some of the stocks in the DJIA include: Walmart, Apple, and Nike.
- NYSE (New York Stock Exchange): Quite literally a stock exchange based in New York. It is the world’s largest.
- P/E Ratio: P/E Ratio stands for “Price-To-Earnings Ratio,” and it compares how the market price of a stock compares to the earnings per share of a stock.
- Portfolio: The combination of the assets you own. In other words, your “starting lineup” for the assets you own. This can include several things from stocks, to precious metals, to cash.
- Ticker Symbol: The letter version for the name of a stock listed on an exchange. Here’s an example: Tesla, Inc. Is listed as TSLA. TSLA is Tesla’s ticker symbol.
- Trading Platform: The software you use to trade assets. This could be TD Ameritrade, E*Trade, etc.
This is a very short list of investment terms, but definitely some good ones to know. I’ll be sure to post some more investment terms throughout the giveaway.