You Keep Using That Word
There's a lot to digest when it comes to understanding the wide world of investing. Here are some common investment terms and their definitions to help you out.
Appreciation: The increase in value of a financial asset.
Asset allocation: The process of dividing investments among cash, income and growth buckets to optimize the balance between risk and reward based on investment needs.
Bear market: A bear market is a prolonged period of falling stock prices, growing unemployment, or economic recession.
Bull market: Any market in which prices are advancing in an upward trend.
Diversification: Owning a variety of different investments to reduce risk and increase the potential for returns and protection from future market volatility.
Dividends: Dividends are a portion of a company's profits distributed to its shareholders. Typically paid quarterly or annually, dividends are a way for companies to share their financial success with investors and provide them with a regular income stream based on the number of shares they own.
Fractional shares: Partial shares of a company's stock that are less than one full share, allowing investors to own a portion of a stock rather than a whole unit.
Investment portfolio: A collection of various financial assets, such as stocks, bonds and mutual funds, owned by an individual or an organization to achieve financial goals and manage risk.
Liquidity: Refers to the degree to which an asset or security can be quickly bought or sold in the market without affecting its price. It is a measure of how easily an asset can be converted into cash or cash equivalents without causing a significant impact on its market value.
Mobile app integration: The process of linking a bank account or financial service to a mobile application, allowing users to manage their finances, track transactions and access banking services conveniently from their smartphones or tablets.
Portfolio: A collection of investments owned by an organization or individual that is managed as a collective whole with specific investment goals in mind.
Stocks: Also known as shares or equities, stocks represent ownership in a corporation and are traded on the stock market. Investors purchase stocks in the hope of generating profits through capital appreciation and dividends as the company grows and becomes more profitable.
Stockholder: The owner of stock in a company, also sometimes called shareholder.
