Glossary-+Stocks

[|EconEdlink]

Stocks in large, nationally known companies that have been profitable for a long time and are well-known and trusted.
 * Blue Chip Stocks**

A profit realized from the sale of property, stocks or other investments.
 * Capital Gain**

A loss suffered upon the sale of property, stocks or other investments for less money than the purchase price of the asset in question.
 * Capital Loss**

A legal entity owned by shareholders whose liability for the firm's losses is limited to the value of the stock they own.
 * Corporation**

To invest in a variety of stocks, bonds, money market accounts, etc., in order to spread risk.
 * Diversify**

A share of a company's net profits paid to stockholders.
 * Dividend**

Stock, both common and preferred. Also, the value of mortgaged property after accounting for charges against it or money owed.
 * Equity**

The seven governing members of the Federal Reserve System who are appointed by the President for 14-year terms. Board members play an important role in determining the country's monetary policy which, in turn, strongly influences economic activity.
 * Federal Reserve Board**

Banks, credit unions, pension funds, insurance companies, mutual fund companies and other financial institutions that bring together savers and borrowers and buyers and sellers of stocks and bonds.
 * Financial Intermediaries**

Investment that involves ownership of a firm or business in another country. FDI involves things such as constructing factories on foreign soil, rather than investing in stock markets (portfolio investment). The investing company frequently provides financial, managerial and technical assistance and other resources to the foreign country.
 * Foreign Direct Investment (FDI)**

The purchase of financial and/or physical assets in one county by businesses or people in another county. This term can refer to either foreign direct investment or investment in foreign financial assets, such as stocks.
 * Foreign Investment**

A mutual fund whose objective is to match the composite investment performance of a large group of stocks or bonds such as those represented by the Standard & Poor's 500 Composite Stock Index.
 * Index Fund**

A company's first sale of stock to the public. When a company "goes public," it sells blocks of stock shares to an investment firm that specializes in initial offerings of stocks and resells them to the public.
 * Initial Public Offering (IPO)**

A financial intermediary, such as a pension fund or a mutual fund, that buys stock and other investments for clients.
 * Institutional Investor**

An itemized list of goods held by a person or business. Also a quantity of goods held in stock.
 * Inventory**

The process of putting money someplace with the intention of making a financial gain. Investment possibilities include stocks, bonds, mutual funds, real estate, and other financial instruments or ventures.
 * Investing**

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.
 * Investment**

Economic variables such as unemployment claims, manufacturers' new orders, stock prices, and new plant and equipment orders that tend to change before real output changes.
 * Leading Economic Indicators**

A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors.
 * Mutual Fund**

An electronic marketplace enabling buyers and sellers to get together via computer and hundreds of thousands of miles of high-speed data lines to trade stocks. NASDAQ used to be the acronym for National Association of Securities Dealers Automated Quotation System.
 * NASDAQ**

The oldest stock exchange in the United States, founded in 1792.
 * New York Stock Exchange (NYSE)**

An account established by a business to fund retirement benefits for its workers. Pension funds invest in stocks, bonds, mutual funds and real estate.
 * Pension Fund**

The market where new securities are offered for sale for the first time. Investment banks buy shares of stocks directly from corporations that issue them and sell these shares to others.
 * Primary Market**

As applied to investments: the greater the risk, the greater the potential reward. For example: passbook savings accounts offer depositors very low risk but also low rates of interest; growth stocks are much riskier, but they offer a potential for big gains.
 * Risk/Reward Ratio**

A market in which stocks can be bought and sold once they are approved for public sale; for example, the New York Stock Exchange.
 * Secondary Market**

Engagement in business transactions involving considerable risk but offering the chance of large gains, esp. trading in commodities, stocks, etc., in the hope of profit from changes in the market price.
 * Speculation**

An ownership share or shares of ownership in a corporation.
 * Stock**

A market in which the public trades stock that someone already owns; the buying and selling of stock.
 * Stock Market**

A mutual fund that buys stocks in order to make profits for the investors.
 * Stock Mutual Fund**