Investment Terms

As investment terms become more diverse and complicated, we, at Investments.net, have made a basic attempt to provide the most common investment terms. You may already be familiar with some of these investment terms, while others you may not have heard of. So, here’s our selection of investment terms:

Investment Terms – A

Accrued interest: Interest due on a bond since last payment.

American Depositary Receipt (ADR): US bank-issued security in lieu of foreign shares. Facilitates trading of foreign shares in US markets.

AMEX: American Stock Exchange

Assets: Corporate ownership in cash, investments, materials, inventories, buildings, machinery, and other fixed assets.

Investment Terms – B

Bear: Market decline.

Bear market: Market on the decline.

Bond: Typically issued either by US Government as savings bonds or corporations as corporate bonds.

Bull: Expectation of market rise.

Bull market: Improving market.

Investment Terms – C

Capital gain: Profit from sale of an asset.

Capital loss: Loss from sale of an asset.

Capital stock: Shares symbolizing ownership in corporation.

Certificate of Deposit (CD): High interest rate instrument.

Investment Terms – D

Diversification: Spreading investments and their associated risk across a larger pool of investments.

Dividend: Distributed income amongst shareholders.

Investment Terms – E

Equity : Ownership interest in a company.

Investment Terms – F

Face value: Value of bond — amount payable at maturity.

Investment Terms – G

Government bonds: Government-issued bonds.

Growth stock: Stock in a high growth company.

Investment Terms – H

Holding company: Corporation owning securities of another, or also other forms of investments, such as real estate.

Investment Terms – I

Index: NYSE, for example.

IPO (Initial public offering): Initial offering of stock to public.

IRA: Individual retirement account.

Investment Terms – L

Leverage: Influence of bonds, preferred stocks, or both outstanding.

Liabilities: Outstanding items, such as wages and salaries, dividends, and other liabilities.

Investment Terms – M

Mutual fund: Aggregation of asset classes and investments managed by professionals.

Investment Terms – N

Nasdaq: National Association of Securities Dealers Automated Quotations.

NYSE: New York Stock Exchange (NYSE)

Investment Terms – O

Over-the-counter: Securities dealers not necessarily members of securities exchange.

Investment Terms – P

Portfolio: A collection of various asset classes, such as bonds, stocks, and others.

PE Ratio: Price-to-earnings ratio.

Investment Terms – R

REIT: Real Estate Investment Trust

Investment Terms – S

SEC – The Securities and Exchange Commission

Stock: Shares representing ownership in corporation.

Investment Terms – V

Variable annuity: Annuity is a contract between the holder and insurance company, wherein the insurance company would provide a fixed (or variable) retirement income.

Investment Terms – Y

Yield : A measure of return.

Investment Terms – Z

Zero coupon bond: Bond that does not pay interest, but is priced at a discount.

Disclaimer: This article is not intended as investment advice. You must check with a qualified professional before making any investment decision.