65 terms every investor needs to know: (this is a 4 year finance degree in less than 2 minutes)
1. Asset allocation - the percentage of each asset you own 2. Diversification - when you own different types of assets 3. Mutual fund - a pool of money from investors to invest in groups of assets 4. Index fund - a type of mutual fund that tracks a list of stocks
5. ETF - a fund that trades like a stock 6. Annualized returns - overall returns averaged to year over year returns 7. Dividend - distributed profits to shareholders 8. Yield - the return on an investment
9. Market cap - total value of a public company 10. Large cap - company valued at least $10B 11. Mid cap - company valued between $3B - $10B 12. Small cap - company valued between $250M - $3B 13. Market index - a list of stocks
14. Stock option - the right, but not obligation, to buy/sell a stock at a price and date that’s agreed upon 15. Basis point - a unit of measurement. One-hundredth of a percent 16. Asset - something that has value
17. Commodity - raw materials that can be bought and sold 18. Blue chip - a well established company that ranks in the top of its sector 19. Penny stock - a stock worth $5 / share or less
20. Short squeeze - when short sellers are forced to buy back their shares and the price goes up 21. Stop loss order - a trigger to sell a stock when it reaches a certain price 22. Ask - how much sellers want for a stock 23. Bid - how much buyers are willing to pay for a stock
24. Balance sheet - shows assets and liabilities 25. Income statement - shows revenue and expenses 26. Cash flow statement - tracks how a business uses cash 27. Cash equivalent - assets that are highly liquid
28. Cash flow - money that flows in and out of a business 29. Bear market - a market decline of 20% or more 30. Recession - 2 consecutive quarters of declining GDP 31. Bull market - when the market goes up without falling 20% 32. Bubble - when asset values are overly inflated
33. Broker - where you buy your stocks 34. Capital gain - when you sell an asset and profit 35. Capital loss - when you sell an asset and lose money 36. Dilution - when a public company issues more shares 37. DCA - when you invest periodically with a fixed dollar amount
38. Equity - a stock/ownership of assets 39. Exchange - where stocks are bought and sold 40. Expense ratio - the fee associated with investment funds 41. Fixed income investments - fixed payments you receive from an investment 42. Bond - a loan to an company/government
43. Maturity date - expiration date 44. Fund manager - person who buys/sells assets in a fund you invest in 45. Hedge fund - funds for wealthy investors that use alternative investment strategies 46. Liquidity - how fast an asset can be bought/sold
47. Margin - a loan for investing 48. Merger - when a company absorbs another 49. Acquisition - when a company buys another 50. IPO - when a company can be bought/sold on an exchange 51. Reverse split - when multiple shares are combined to create 1 share
52. Stock split - when shares are split to create multiple shares 53. Net income - company profit 54. Book value - an asset’s value based on its balance sheet 55. Premium - how much you pay for an asset above market value
56. Prospectus - a disclosure document for an investment 57. Earnings report - a businesses financial results from a specific period 58. Resistance - the point where a stock will stop going up and start going down
59. Risk tolerance - how much risk you can handle 60. Short selling - when you bet an investment will decline in value 61. Halt - when a stock cannot be bought or sold 62. Taxable account - investment account without tax advantages
63. Tax advantaged account - investment account that saves money on taxes 64. Fundamental analysis - investment strategy that looks at a businesses intrinsic value 65. Technical analysis - investment strategy that focuses on price movement patterns
