Welcome to Getting Technical's financial Glossary Of Investment Terms that covers the important investment stuff. Study the following and you’re on your way to being a successful investor.
By the way, did you hear about the two Financial Planners on the Titanic? One of them felt the ship shutter and shouted - I think we hit something. The other replied - why should you care, it's not your boat.
Important Stock Market Definitions
Bull Market: What the markets do after you sell because of a recession, corporate scandals, political unrest, war jitters and soaring oil & gold prices.
Bear Market: What the markets do after you buy because of bright economic conditions, corporate earnings growth, peace in the middle east, and low oil & gold prices.
Bonds: A magical piece of paper that is worth more when the economy is bad and then worth less when the economy is really bad.
Stock: A magical piece of paper that is worth more when the economy is good and then worth less when the economy is really good.
Call Option: The opportunity to lose small amounts of money over short time periods.
Cash Flow: The movement of money from a mutual fund to the fund manager. Sometimes called management fees or MER’s.
Commission: The money you pay to your broker to buy and sell.
Trailer Fees: The money you pay to your financial planner to buy and never sell.
Day Trader: The opportunity to loss large amounts of money over short time periods.
Long Term Investor: A day trader who has refused to sell a losing trade.
Good Investor: Will agonise for weeks over a buy decision and sell on impulse.
Bad Investor: Will buy on impulse and agonise for weeks over a sell decision.
Investor Advocate: A bad investor looking for someone else to blame.
Financial Planner: Jack of all trades and master of none.
Margin Debit: The unique opportunity to have your original investment go to zero and lose 200 percent of your capital.
Market Correction: What the markets do the day after you buy stocks.
P/E Ratio: Better known as the panic/exit ratio. Fund managers use this number to calculate the time required for all of the unit holders to bail out of a fund.
Short Position: A type of trade where a person sells stocks they don't actually own. You can also be short on rent payments, car payments and alimony.
Stock Broker: The master illusionist who disappears when your stock goes down, only to reappear if the stock subsequently rallies.
Stock split: When your ex-wife and her lawyer split your equity portfolio equally between themselves.
Fundamental Analyst: Analysts who think they are right.
Technical Analyst: Analysts who think the market is right.
Momentum Investing: The art of buying high and selling lower.
Value Investing: The art of buying low and selling lower.
We welcome other additions to our Glossary
Dollar Cost Averaging: The Strategy of averaging down on a losing mutual fund investment.
Bill Carrigan
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