Stocks and the Stock Market

Low selling Price

Lowest selling price of stock for the previous day.

Beta

A measure of a stock's volatility compared to changes in the overall stock market.

Stock

A share of ownership in the assets and earnings of a business.

Financial Planner

A specialist who is trained to offer specific financial help and advice.

Stock Ticker Symbol

A stock's abbreviated trading symbol name.

securities exchange

Is a marketplace where brokers who represent investors how buy or sell securities.

over the counter (OTC) market

Is a network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange.

Net change

Difference between closing price of previous day and current day.

Dividends

Distribution of earnings paid to stockholders.

Prospectus

Document that discloses information about a company's earnings, assets and liabilities, its products and services, a particular stock, and the qualifications of its management.

High Selling Price

Highest selling price of stock for the previous day.

Book Value

Net worth of a Company.

Year to Date

Stock price percent change from January 1st.

Market Price

The amount a willing buyer will pay a willing seller for a stock.

New York Stock Exchange

The oldest and largest exchange with the strictest company standards.

Capital Loss

The sale of an investment for less than its purchase price.

Investment Risk

The uncertainty about the outcome of an investment.

Dividends per Share

Total cash paid to common stockholders per share.

corporate bond

a corporation's written pledge to repay a specific amount of money along with interest

current yield

annual dividend of investments divided by the current market value.

Blue chip stock

considered a safe investment that generally attracts conservative investors.

mutual fund

investment which investors pool their money to buy stocks bonds or other securities

large cap stock

is a stock from a corporation that has issued a large number of shares and stock and has a large amount of capitalization.

Capitalization

is the total amount of stocks and bonds issued by a corporation.

Income stock

pays higher than average dividends compared to other stock issues.

Rate of Return

the increase or decrease in the original purchase price of an investment.

price-earnings (PE) ratio

the price of one share of stock divided by the corporations earnings per share of stock over the last 12 months.

government bond

written pledge of a government or a municipality such as a city, to repay a specific sum of money with interest

Private corporation

A closely held corporation, a company that issues stock to a small group of people. These stocks are not traded openly in stock markets.

Stock Market

A general term used to describe all transactions involving the buying and selling of stock shares issued by a company.

Public corporation

A publicly held corporation, a company that sells its shares openly in stock markets, where anyone can buy them.

Securities

All of the investments (stocks, bonds, mutual funds, options, and commodities) that are bought and sold on the stock market

Portfolio Diversification

An individual who has a variety of investments tools to decrease risk.

Earnings Per Share

How much income a company has available to pay in dividends and reinvest as retained earnings on a per share basis.

Tax-Deferred Income

Income that is taxed at a later date.

Dow Jones Industrial

Oldest Indicator of the ups and downs of stock market. Lists 30 leading stocks.

Price/earning Ratio

Relationship between the price of one share of stock and the annual earnings of the company.

Countercyclical Stock

Stock from a company which gives consistent records of returns even when the economy is suffering because their product is always in demand.

Bull Market

Stock market experiences a general rise in prices and stock trading volume for shares over a period of time.

Regional Stock Exchange

Stocks traded to investors who are living in a specific geographical area.

Dividend yield percentage

The dividend expressed as a percentage of the price of the share.

Cyclical Stock

a stock which is greatly influenced by changes in the economic business cycle.

earnings per share

another measurement of a company's performance

defensive stock

is a stock that remains stable during declines in the economy.

equity capitol

is money that a business gets from its owners in order to operate

Blue Chip Stock

stock from nationally recognized companies which dominate the industry often having annual revenue of one billion or more

Small cap stock

stock issued by a company with a capitalization of $500 million or less.

Capital Gain

Profit from the sale of assets such as stocks, bonds, or real estate.

Common Stock

Shares or units of ownership in a public corporation. The shareholder has voting rights in the corporation.

Stock Split

Shares owned by existing stockholders are divided into a larger number of shares.

Preferred Stock

Shares which pay fixed dividends and have precedence over common stock.

Bear Market

Stock market that experiences a general decline in prices of stock. Not all stocks experience a decline in value, but most do.

Par Value

The fixed value stated on a preferred stock certificate which indicates the dividends which shall be payed to the shareholder.

52 week High

The highest price a stock was sold for in the past 52 weeks.

52 week Low

The lowest price a stock was sold for in the past 52 weeks.

Stock Certificate

The piece of paper a shareholder receives representing their ownership of a stock.

Close

The price of the last share sold for the day

American Stock Exchange

The second largest exchange with less stringent requirements allowing for younger, smaller companies to be listed.

total return

a calculation that includes that annual dividend as well as any increase or decrease in the original purchase of the price of the investment.

bear market

a market condition that occurs when investors are pessimistic about the economy and sells stocks.

bull market

a market condition that occurs when the investors are optimistic about the economy and buy stocks

Broker

a person who is licensed to list, lease, buy, exchange, auction, negotiate, or sell interest in real property for others and to charge a fee for services

Growth Stock

a stock from a company which has a consistent record of relatively rapid growth and earnings in all economic conditions.

Income Stock

a stock which pays higher than average dividends because the company chooses to retain only a small portion of the profits

preferred stock

a type of stock that gives the owner the advantage of receiving cash dividends before common stockholders.

common stock

a unit of ownership of a company

cyclical stock

has a market value that tends to reflect the state of the economy.

Growth stock

issued by a corporation whose potential earnings may be higher than the average earnings predicted for all the corporations in the country

Par Value

An assigned dollar value that is printed on a stock certificate

Speculative Stock

A very high risk stock from a company with potential for substantial earnings in the future.

Tax-Exempt Income

Income that is not taxed.

Portfolio

Is a collection of all the securities held by an investor.

NASDAQ

Monitors fast moving technology and financial services stocks. Usually the companies are smaller and transactions occur over an electronic market.

Volume 100's

Number of transactions to the share on the reported day represented in 100's.

penny stock

sells for less than $1 a share although it can sell as much as $10 a share.

Value Stock

stock from a company which has a low market price considering historical earning records and value of current assets