When investing your cash, it is important to have a thorough understanding and a clear expectation as to how the investment world works. For those just starting out, there can be tremendous confusion when it comes to the dialog that goes along with investing.
Here are 10 investing terms every investor should know:
When a seller is selling a security, the ask price is the lowest price the seller will be willing to agree on for the sale.
2. Bear Market
A bear market refers to the time when stock prices drop for a considerable about of time in the stock market. The opposite of this type of market is known as a bull market.
When a buyer is purchasing a security, the bid price is the highest price the buyer will agree to pay for the sale.
4. Blue-chip Company
An international or national company whose stock maintains a solid history of growth on a consistent basis.
Businesses or governmental agencies issue these to investors in order to grow capital. Investors will receive an interest amount over a specified amount of time until the point of maturity. At this time, a mature bond will provide the investor with the amount of cash initially used in the investment.
Read: Guide To Mutual Funds
A third party who serves as a middleman between those selling stocks and those buying stocks. A broker earns a commission amount on each transaction that is made between buyer and seller.
The amount of money paid out to shareholders by companies for their stocks, typically using cash payments.
8. Mutual Fund
A company offers this kind of fund, using the money from the fund sale to purchase other investments. These funds require only a minimum investment.
The assortment of investments a person or business owns.
Offered by a company to buyers who wish to own a percentage of that company.
There are many more investment terms that play a part of the strategies of investment. Those who are just starting out with their investments need to learn the ins and outs of the different investment types as well as the different resources available for growing investment funds. Professional brokers can be an asset to those interested in advice about growing their portfolio or there are many free resources available to investors who’d prefer the do-it-yourself investment strategies.