Some Important Investment Terms that You Have to Know
If you really want to become a proficient investor, you will need to learn the language in order to keep up with the trends and understand what is being said around you. You don’t want to be the one feeling left out when everyone else is chatting about investing. Also, if you’re going to a meeting with a potential broker and you want to have a head start or if you simply want to read and understand more about investing and not feel particularly confused, learning some important investment terms which are used often in investment parlance, will benefit you greatly. What these various terms and definitions will help you do is to build up your understanding of investment with all these important investment terms that you have to know.
These are just a few of the many investment terms you will have to familiarize yourself with if you intend to get into the investment game:
- Ask: The lowest price a seller is willing to accept when selling a stock.
- Bid: The highest price a buyer is willing to accept when purchasing a stock.
- Blue Chip: A company that has a history of solid earnings, regular and increasing dividends, and an impeccable balance sheet.
- Book Value: The value of the company if all liabilities were subtracted from assets and common stock equity.
- Broker: A person that buys or sells an investment for you in exchange for a fee which is called a commission.
- Dividend: A portion of a company’s income that is paid out to shareholders on a quarterly or annual basis.
- Dow Jones Industrial Average: The Dow Jones Industrial Average (or DJIA for short) is the most popular and widely used standard used to evaluate the U. S Stock Market.
- Market Cap: A company’s market capitalization (or “market cap” as it s frequently called) can be resolved by taking the number of outstanding shares of stock and multiplying them by the current share price.
- NASDAQ: The NASDAQ is an exchange which trades mostly in technology stock of companies such as Microsoft and Cisco.
- Spread: A spread is defined as the difference between the Ask and the Bid.
- Stock: Stock is ownership; this ownership may be of a company or a corporation.
- Yield: When dividends have been paid, yield can be defined as the percentage of the stock price in relation to the dividend paid.
These terms which are listed here are just a few of the many common terms and phrases which are used on a regular basis in the world of investing. If you have questions about a specific investment term and what it means, you can always seek out the help of an investment expert in order to provide you with the right answer.
In order to learn and understand more about investing and commonly used investment terms, you can read more about investing and try to understand as much as possible. You can also sign up for newsletters, read books and magazines and take some time to research the Internet and make yourself an expert in all things investment. Your new knowledge will assist you greatly by helping your portfolio grow and increasing your profits at the same time. You should also find the idea of investing much more enjoyable as you get to understand it better.
Guy Starbuck is a tennis and golf playing, health oriented, coffee drinking writer and financial guru who writes for PennyStockMaven.com, MoneyAutoPilots.com, and ForexFoundations.com.
