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Investing in stocks
| Term | Definition |
|---|---|
| Dividends | a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves) |
| Common Stock | shares entitling their holder to dividends that vary in amount and may even be missed, depending on the fortunes of the company. |
| Return on Investment | measures the gain or loss generated on an investment relative to the amount of money invested |
| Blue Chip Stocks | stock is the stock of a large, well-established and financially sound company that has operated for many years |
| Price/Earnings Ratio | the measure of the share price relative to the annual net income earned by the firm per share. |
| Bear Market | A market characterized by falling prices and poor investing |
| Bull market | A period of risking stock prices and positive investing |
| Stockholder | Owners of a corporation |
| Market order | an order to buy/sell stock at its normal market price |
| Market value | Marketplace price of a stock |
| Odd lot | less than 100 shares of stock |
| Proxy | Stockholder's written authorization to transfer voting rights to someone else, usually the company's manager |
| Par value | assigned dollar amount that is printed on a stock certificate |
| Round Lot | Shares bought/sold in multiples of 100 |
| Limit order | An order to buy/sell a stock only if the price is within specific limits |
| over the counter market | network of brokers buying/selling securities of corporations that are not listed on the securities exchange |
| Securities exchange | Marketplace where brokers who represent investor buy/sell securities |
| Speculative investment | Investment with a chance of marking a quick profit |
| Direct investment | Buying stock directly from a corporation |
| Dividend reinvestment | Using dividend previously earned on stocks to buy more shares |
| earnings per share | corporations after-tax earning divided by the number of outstanding shares of common stock |
| stock index | a benchmark used of judge the performance of investments |
| stock broker | employee of a brokerage firm who buys and sells securities for investors |
| stock split | increase in the number of outstanding shares of a company's stock |
| ticker symbol | abbreviated term that is used to identify a stock for trading purposes |