Anything of value that someone owns, such as cash, stocks, bonds, or property.
B
Bear market
A period when prices across the market are falling, commonly defined as a drop of 20% or more from a recent high. Read the lesson →
Beta
A measure of how much a stock has tended to move compared with the overall market. A beta above 1 means bigger swings than the market; below 1 means smaller ones. Read the lesson →
Bond
A loan an investor makes to a government or company. The borrower pays interest and returns the original amount at the end. Read the lesson →
Broker
A company or person that carries out buy and sell orders on behalf of investors.
Bull market
A period when prices across the market are generally rising and investors are optimistic. Read the lesson →
Buyback
When a company buys its own shares back from investors. With fewer shares in existence, each remaining share represents a slightly larger slice of the company.
C
Capital gain
The profit made when something is sold for more than was paid for it.
D
Diversification
Spreading money across many different investments so that one bad result does less damage.
Dividend
A share of a company's profits paid out to its shareholders, usually in cash. Read the lesson →
E
Earnings
A company's profit: the money left over after its costs are paid. Public companies report earnings every three months.
EPS (earnings per share)
A company's profit divided by the number of its shares. It shows how much profit belongs to each share. Read the lesson →
ETF (exchange-traded fund)
A single investment that holds many stocks or bonds at once and can be bought and sold like a stock. Read the lesson →
Exchange
A marketplace where stocks are bought and sold, such as the New York Stock Exchange or the Nasdaq.
F
Federal Reserve
The central bank of the United States, often called the Fed. Its decisions on interest rates affect the whole economy. Read the lesson →
G
Guidance
A company's own forecast of how its business will do in the coming months. Stocks often move more on guidance than on past results.
I
Index
A measurement that tracks a group of stocks to show how a market is doing overall. The S&P 500 is an index of about 500 large U.S. companies.
Inflation
The rate at which prices rise over time, which means each dollar buys a little less. Read the lesson →
Interest rate
The cost of borrowing money, shown as a percentage of the amount borrowed. Read the lesson →
IPO (initial public offering)
The first time a company sells its shares to the public on a stock exchange.
L
Liquidity
How quickly and easily something can be sold for cash without its price changing much.
M
Market capitalization
The total value of all of a company's shares: the share price multiplied by the number of shares. Often shortened to market cap. Read the lesson →
O
Option
A contract that gives the right, but not the obligation, to buy or sell a stock at a set price before a set date. Read the lesson →
P
P/E ratio
A company's share price divided by its earnings per share. It shows how much investors are paying for each dollar of profit. Read the lesson →
Portfolio
The full collection of investments that a person or fund owns.
R
Recession
A significant, widespread decline in economic activity that lasts for months.
Revenue
The total money a company brings in from sales, before any costs are taken out.
S
Sector
A group of companies in the same part of the economy, such as technology, energy, or health care.
Share
A single unit of ownership in a company. Also called a stock. Read the lesson →
Shareholder
Someone who owns at least one share of a company.
T
Ticker symbol
The short code used to identify a stock on an exchange, such as AAPL for Apple.
V
Volatility
How much and how quickly a price moves up and down. Higher volatility means bigger swings.
Y
Yield
The income an investment pays each year, shown as a percentage of its price.