Asset—Something of value owned by the
company. May be tangible, such as a
piece of machinery; or intangible, such as goodwill.
Bear Market—A declining market
Bid—The price offered by a willing buyer
Bond—An instrument of debt.
In issuing bonds, a corporation agrees to pay holders a stated rate of
interest until principal is repaid on a specific date.
Bull—A rising market
Broker—A firm or individual who arranges a
transfer of securities between a buyer and a seller, charging a fee for the
service.
Capital Gain or capital loss—Profit or loss
from the sale of a capital asset.
Dividend—Payment a company makes, in cash
or stock, to its shareholders.
Earnings per share—Of paramount concern to
the common shareholder, earnings per share is found by dividing net income after
any preferred dividends by the number of shares of common stock outstanding.
Government bond—An evidence of US
government debt, considered to offer the lowest possible financial risk.
Income stock—A stock offering a liberal
yield.
Inflation—A period during which the
purchasing power of the dollar is declining.
Interest—Payment to a creditor by a
borrower for the use of money.
Limit order—An order to a broker to buy a
specified quantity of a security at or below a specified price or to sell it at
or above a specified price (called the limit price).
Market price—The price at which
transactions in a security take place.
Mutual Funds—Typically consist of a group
of stocks, bonds, or money-market securities from more than one source.
There are three types—income funds )for people who need money to live
on); growth funds (pay low dividends or one—works best for investors who can
leave money in the fund so it can grow over a long period of time;
and balanced funds (combination of stocks and bonds).
Maturity—The date on which an obligation
falls due.
Net worth—All assets minus all liabilities
of a corporation; equivalent to stock, paid in capital, and retained earnings.
New York
Stock Exchange—The largest auction market securities in the nation.
Portfolio—All of the securities held by an
individual, investment club or institution.
Price/earnings ratio—The market price of a
security divided by the earnings per share.
Used to determine whether a stock represents value at a given price.
Profit—Same as earnings or income.
Revenues—Synonymous with sales and receipts
Shareholder—Synonymous with stockholder or
shareowner, the owner of one or more shares of a corporation.
Stock—Businesses need money to grow.
To get this money, some businesses sell shares, units of ownership of
their company.
Stock split—The issuance of a number of
shares for each share of stock outstanding.
The common purpose of a split is to broaden ownership and increase
marketability.
Stop order—A market order to buy or sell a
certain quantity of a certain security if a specified price is reached or
passed.
Stop-limit order—An order to buy or sell a
certain quantity of a certain security at a specified price or better but only
after a specified price has been reached.
Treasury bill—A US government obligation
that matures within a year of issuance.
Treasury bond—A US government obligation
that matures more than five years from the date of issuance.
Treasury note—A US government obligation
that matures from one to five years from the date of issuance.
Yield—The per-share dividend divided by the
per-share cost of the stock.
Vocabulary from Starting and running a Profitable
Investment Club by Thomas E.
O”Hara and Kenneth S. Janke, Random House, 1998.
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