A2Z Stock Market Guide

It is the A to Z giving detailed guide on stock market and trading in stock market ????

Trading the stock can at times be very much like attempting to find your way in an immense sea. As can be seen, there are many terms, approaches, and even trends that can cause confusion. But fear not! What you are holding and reading right now is an extremely detailed navigational tool, or the A to Z of trading and investing.

A – Assets

In the stock market, assets refer to something of value for instance shares, bills and notes and fixed properties. It is necessary to comprehend various kinds of assets and their roles in developing a healthy investment portfolio.

B – Bonds

Bonds are borrowed funds in the form of a financial security that is issued to the public by companies or sometimes by countries. They are supposed to be less risky than equities and give fixed stream of income in the form of ‘interest’.

C – Capital Gains

Capital gains can refer to any sort of profit that results from the sale of an asset with a presold price that is higher than the buying price. Of course it is important to comprehend as to how these gains are taxed and how it alters the investment plan.

D – Diversification

Diversification is the spread of investment across various classes of securities with the main aim of reducing risks. This is usually the case when one is going for a well-diversified portfolio in the stock market to minimize on following volatility processes.

E – Equity

Equity can be described as ownership in a company and that is expressed in shares of this company’s stock. The equity holders hold rights to receive part of the net income of the company along with the assets of the business entity.

F – Fundamentals

Fundamental analysis concerns the assessment of a firm’s financial strength with reference to the revenues and profits and other financial statements.

G – Growth Stocks

Growth stocks on the other hand are shares in companies that are expected to have rates of growth above an average of the rates for other companies. These stocks can give very high returns; however, they are associated with relatively higher risks.

H – Hedge Funds

Hedge Funds are pool of investments where different methods are utilized to earn an active profit for the investors. They tend to employ technical and risky that are complicated.

I – Index Funds

Index funds are investment instruments for mutual or Exchange traded funds that seek to imitate the performance of a specific index for instance, the S&P 500. The global markets more specifically afford diversification at a cheaper price.

J – Joint Account

A joint account is an account in a bank or an investment where two or more people have a share. It enables many users’ contribution to, and disbursement, of the funds in the account.

K – Kicker

In finance, a kicker is defined as an extra characteristic or profit, which is usually in form of additional dollar or yield on an investment.

L – Liquidity

Liquidity refers to the nearness of an asset’s value to its cash value without the likelihood of changing its monetary value. Usually, stock and bonds are recognized as the liquid forms of investment.

M – Market Capitalization

Market capitalization or ‘‘market cap’’ is in effect the market value of all instrumentalities of a company’s equity, namely its shares of stock. It give the market an insight of a company size as well as the investment worth.

Fund; Net Asset Value (NAV).

NAV stands for the net asset value and is calculated as the total value of the investments in an investment fund’s portfolio less its liabilities. It is important when evaluating Mutual funds and Exchange traded funds commonly referred to as ETFs.

O – Options

Futures are financial instruments which are agreements by two parties to exchange, at a certain future date, an asset for a stated price for that date.

P – Portfolio

An investment portfolio can be defined as a set of investments that may belong to a person or an organization. Managing a portfolio is all about achieving the right level of risk and return that is appropriate to the investor’s plan.

Q – Quotation

A quotation means the price of a security at which it trades in the market at a particular period. It is very relevant in making a perfect decision to buy or sell a security.

R – Risk Management

Risk management procedures can be defined as activities that aim at identifying and controlling risks in an investment program and in achieving the long-term objectives for the preservation of the latter.

S – Stock Splits

A stock split gets realized when a company decides to issue more stock to the shareholders, which means that the total number of stocks in circulation rises, yet the cost per piece comes down. It is usually carried out with the intention of lowering the price of stock and thus making it possible for more people to acquired them.

T – Technical Analysis

Technical analysis entails the prediction of price trends in the future by analyzing the past prices and the volumes of the contracts. This approach is based on charting patterns as well as other technical markers.

U – Underwriting

Underwriting involves the selection and bearing all risks as well as purchasing of the security from the consideration of new security by investment banks. It plays the major role in the capital raising process and is widely used in its realization.

V – Volatility

Relative to fragility, Volatility determines the extent to which a given stock fluctuates in a given amount of time. Volatility has a higher value in cases where the price is more sensitive towards its change; this could be related to the possible risk and return of the particular Stock.

W – Wall Street

The New York’s Wall Street represents the key financial markets and it is the location of main securities exchanges and large financial corporations in USA.

X – X-Factor

In investing, ‘‘X-Factor’’ is defined as a factor or an aspect that is extraordinary or unpredictable in determining the value of the stock of a particular firm. This could be an invention or a new law as it is often the case with rupture innovations.

Y – Yield

Yield refers to income accruing from investment in terms of cost of investment often in the form of percentage. Dividend or interest payment is often used as a measure to determine the profitability of the income producing assets.

Z – Zero-Coupon Bonds

It should be noted that zero coupon bonds are bonds which do not pay interest periodically. They are floated at premium and redeemed at par; the interval being the expected profit of the investor.

By know these basic concepts, you’ll be on good position to make the rite decisions and be strong in the field of stock market. Just bear in mind that investing always means learning and on-going process of evolution. Being knowledgeable, being tactical, and guess what? You’ll soon witness your investments bloom!

By- Aditi Singh Tharran