Home/Glossary/Investing Terms

Investing Terms

Financial terms related to stocks, bonds, funds, and investment strategies.

Accrued Interest

Interest that has been earned or incurred but not yet paid or received.

→

Asset Allocation

The distribution of portfolio investments among stocks, bonds, cash, and other asset classes.

→

Bear Market

A market condition where prices fall 20% or more from recent highs.

→

Beta

A measure of a stock's volatility relative to the broader market.

→

Bond

A debt security where the issuer borrows money from investors and pays periodic interest.

→

Bull Market

A market condition with rising prices, typically 20%+ gains from recent lows.

→

Diversification

Spreading investments across different assets to reduce overall portfolio risk.

→

Dividend

A portion of company profits distributed to shareholders, usually quarterly.

→

Exchange-Traded Fund (ETF)

A basket of securities traded on a stock exchange like a single stock.

→

Expense Ratio

The annual fee charged by a fund, expressed as a percentage of assets.

→

Fixed-Income Security

An investment paying a fixed interest rate or dividend at regular intervals.

→

Growth Stock

A stock in a company expected to grow faster than average, typically paying little or no dividends.

→

Market Index

A statistical measure of a market segment used as a benchmark for performance.

→

Leverage

Using borrowed money to increase potential returns, amplifying both gains and losses.

→

Market Capitalization

The total market value of a company's outstanding shares.

→

Municipal Bond

A bond issued by a state or local government to fund public projects.

→

Mutual Fund

A pooled investment vehicle managed by professionals, holding a basket of securities.

→

Price-to-Earnings Ratio (P/E)

A valuation metric comparing a stock's price to its earnings per share.

→

Portfolio

The collection of all investments held by an individual or institution.

→

Rate of Return

The gain or loss on an investment over a period, expressed as a percentage.

→

Rebalancing

Adjusting portfolio allocations back to target weights by buying or selling assets.

→

Rule of 72

A shortcut: divide 72 by annual return % to estimate years until money doubles.

→

S&P 500

A stock market index tracking 500 large U.S. companies; widely used as a benchmark.

→

Stock

A share of ownership in a company, entitling the holder to profits and assets.

→

Time Value of Money

The principle that a dollar today is worth more than a dollar in the future.

→

Treasury Bonds

U.S. government debt securities considered among the safest investments available.

→

Value Stock

A stock trading below its intrinsic value, often with low P/E and high dividend yield.

→

Volatility

The degree of price variation in an investment over time; higher volatility means higher risk.

→

Yield

The income generated by an investment, expressed as a percentage of its cost.

→

Yield Curve

A chart showing interest rates for bonds of different maturities.

→

Asset Class

A category of investments sharing similar characteristics and risk profiles.

→

Back-End Load

A sales fee charged when selling shares of a mutual fund.

→

Bullet Bond

A bond maturing all at once on a single date with no early repayment.

→

Callable Bond

A bond that the issuer can repay before maturity, typically when rates fall.

→

Capital Allocation

The process of deciding how to distribute capital among investments or projects.

→

Cash Dividend

A payment in cash made by a company to shareholders from profits.

→

Covenant

A contractual promise or restriction binding a borrower or issuer.

→

Day Trader

An investor buying and selling securities within the same trading day.

→

Derivative

A financial contract whose value is derived from underlying assets.

→

Dividend Reinvestment

Automatically using dividend payments to purchase additional shares.

→
← Back to all glossary terms