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WHS Stock Market Pie

WHS MoneySmart - Stock Market Pie

American Stock Exchange The market with the second largest trading volume in the U.S. It began as the Curb Exchange and trades small- to medium-sized companies.
annual report Required yearly record of a publicly traded company's financial condition, filed with the U.S. Securities and Exchange Commission and sent to shareholders.
asset Something with value that can be sold or traded.
bear market A nickname for the market when stock prices fall over an extended time and sellers outnumber buyers.
blue chip stock Stock in a well-established, reputable company with a history of good earning. The name resulted from poker game chips, where the blue chips have the most value. General Electric and McDonald's are two examples.
bond A type of loan a company can issue to raise money. A bond investor is paid interest, but has no company ownership.
book value Net equity or worth of a company's stock.
broker An agent who acts as intermediary between buyer and seller.
brokerage/brokerage house A company that employs stock brokers.
bull market A nickname for the market when stock prices raise over an extended time and buyers outnumber sellers.
capital Money used to create new businesses or expand existing ones.
capital appreciation Increase in the value of a stock, or security.
capital gain/loss The difference between selling price and purchase price.
closing price Price of the last transaction for a trading day.
commission Price a broker is paid to buy or sell securities for a client.
common stock Units of ownership for a public corporation, giving owners control of management through voting rights. Offers higher potential returns than preferred stock.
confirmation Written notice from a broker specifying details of a transaction or agreement to buy/sell.
cusip number Series of numbers and letters identifying a stock or registered bond.
custodian An adult or institution that manages an account for another, perhaps because the individual is under age or unable to manage it himself/herself.
cyclical stock A stock whose price reacts to business or economic cycles, rising or falling quickly.
decimalization Stocks are priced in dollars and cents instead of fractions. The first decimal-priced trade on the New York Stock Exchange happened August 28, 2000.
discount broker Charges less for stock transactions but doesn't provide investment advice like a full-service broker.
diversification Investing in more than one security or type of asset to spread the risk of loss. (Not putting all your eggs in one basket.)
dividend Share of company's annual profits paid to stockholders. Payments are calculated per share.
Dividend Reinvestment Program (DRIP) Allows a stockholder to automatically buy more stock with the dividends received on stock already owned. Each company may have its own DRIP plan and absorb more or all brokerage fees.
dividend yield The percent of a stock's price paid out to investors. To find it, divide the annual cash dividend per share by the price of the stock.
dollar cost averaging A strategy where an investor spends the same amount of dollars (say $50 per month) to purchase stock at regular times. The investor buys more shares when the price is low, and fewer when the price is high.
Dow Jones Industrial Average or The Dow The average price of 30 well-known stocks selected by the editors of The Wall Street Journal. It was first devised by Charles H. Dow in 1884 to gauge stock market performance.
earnings The profits from a company, after the cost of sales, operating expenses and taxes are deducted.
earnings per share Company's profit (after-taxes) divided by the number of common shares.
equity The difference between the amount owned and the amount owed. Can also mean ownership interest.
extended-hours trading Trades that take place after an exchange is closed.
fiscal year A 12-month period of company regularly uses as its annual accounting period, often January 1 to December 31.
floor broker Member of the stock exchange who executes trades for his/her firm's clients.
full-service broker Provides investment and asset management advice plus conducts transactions for a commission or fee.
growth stock A company that shows above average gains in earnings, often has a higher P/E ratio, and pays little or no dividends but keeps earnings to grow.
income stock A company with a history of paying regular, substantial dividends.
limit order Investor sets a specific price to buy or sell.
long-term investor Someone who invests typically for five or more years and does not jump in and out of the market.
market order Investor agrees to buy or sell at the best price available.
market value The closing price; also the price when buyers and sellers trade.
monopoly Exclusive control of a product, service or commodity, resulting in power to set prices and eliminate competition.
National Association of Investors Corporation (NAIC) A nonprofit organization providing tools to educate investors and help form investment clubs.
NASDAQ (National Association of Securities Dealers Automated Quotations) America's most active stock exchange. Trades are executed via a worldwide computer network rather than in an actual room. This exchange began as the place to trade "Over-the-Counter" securities.
New York Stock Exchange (NYSE) The oldest, largest, and best known market in the U.S. Also know as the Big Board, it lists more than 1600 companies. Business is transacted at 22 trading posts on the floor.
odd lot Less than 100 shares.
on-line trade A buy/sell order transacted via the Internet.
open order A request to buy/sell placed with a broker but not yet executed.
Over-the-Counter stock Smaller companies not listed or traded on the NYSE or AMEX. Transactions are conducted via phone and a computer network rather than on an exchange floor.
paper profit/loss Net gain/loss a stock shows even though it has not been sold.
portfolio A collection of investments owned by an individual or company.
preferred stock Units of ownership in a company. This class of stock provided no voting rights, specified dividends, and greater security if a company liquidates.
price to earnings ratio (P/E ratio) Stock price divided by earnings; The higher the P/E, the more investors are willing to pay for the stock's growth potential.
profit A security's appreciation plus yield minus original cost.
purchase price Amount paid to buy a security.
retained earnings Net profits kept by the company, usually to expand.
revenue Sales, or the amount a company makes on its products or services.
round lot Accepted unit of trading; 100 shares for stocks.
securities Another name for stocks, bonds, and mutual funds.
securities analyst A person who does reserach, provides an in-depth perspective, and makes recommedations to brokers and investors.
settlement date The day a buyer must pay for a transaction, and seller acknowledges.
share Unit of ownership of a company.
shareholder/stockholder Owner of one or more shares in a corporation.
speculator One willing to take a bigger risk in exchange for greater potential profit.
stock certificate Legal document issued by a company which shows how many shares are owned by the holder.
stock exchange An organized marketplace where securities are bought and sold.
stock index A measure of performance of a group of stocks, often used as a general measure of overall market conditions.
stock split Change in the number of shares that increases/decreases price per share but maintains the same total value. A split can reduce cost per share to make it more attractive for small investors.
stock symbol The letters by which a listed stock is identified. Three or fewer letters are used for the NYSE and AMEX, four or more for the NASDEQ.
Street Nickname for the Wall Street financial community.
street name A convenient way an investor holds stock without possessing the actual certificate. The stock is held in the name of the brokerage, and ownership is shown on the investor's statement of account.
supply and demand Economic forces determining the amount and price of a product produced. Supply is the amount a business is willing to offer for sale. Demand is the amount users would like.
target price Price an investor hopes a stock just bought will rise to in a specified time.
ticker tape A thin piece of continuous paper which lists the prices and trading volumes as stocks trade. Originally, a ticker machine punched holes in a tape, making a ticking sound. Today's ticker tape is a computer screen.
value investing Laying out money now to get more in the future, or the difference between price paid by an investor and the investor's assessment of true value, regardless of the methods to assess that value.
Wall Street The financial district where stock exchanges and several brokerages and banks are located; a street in New York City where the major financial district is located.
Created by: cawhite