Personal Finance: Managing Your Personal Finances Chapter 12 Investing In Stocks

Front 1

stockholders

Back 1

people who own shares of stocks

Front 2

dividends

Back 2

money paid to stockholders from the company's profits

Front 3

capital gains

Back 3

increase in the value of the stock over stock

Front 4

capital loss

Back 4

the price goes down below the price intially paid for it

Front 5

round lot

Back 5

100 shares or multiples of 100 shares of a particular stock

Front 6

common stock

Back 6

a type of stock that pays a variable dividend and gives the holder voting rights

Front 7

proxy

Back 7

a stockholder's written authorization to transfer his or her voting rights to someone else, usually a company manager

Front 8

preferred stock

Back 8

a type of stock that pays a fixed dividend but has no voting rights

Front 9

income stocks

Back 9

stocks that have a consistent history of paying high dividends

Front 10

growth stocks

Back 10

stocks in corporations that reinvest their profits into the business so that it can grow

Front 11

emerging stocks

Back 11

stocks in young, often small corporations that have higher overall risk than stocks of companies that have been successful for many years

Front 12

blue chip stocks

Back 12

stocks of large, well-established corporations with a solid record of profitability

Front 13

defensive stock (aka non-cyclical stock)

Back 13

remains stable and pays dividends during an economic decline

Front 14

cyclical stocks

Back 14

do well when the economy is stable or growing but often do poorly during recessions, when the economy slows down

Front 15

par value

Back 15

an assigned dollar value given to each share of stock

Front 16

market value

Back 16

the price for which the stock is bought and sold in the marketplace

Front 17

return on investment (ROI)

Back 17

formula: profit=paid-sold+dividends

Front 18

stock index

Back 18

a benchmark that investors use to judge the performance of their investments

Front 19

the Dow

Back 19

an average of the price movements of 30 major stocks listed on the New York Stock Exchange

Front 20

securities

Back 20

stocks and bonds

Front 21

securities exchange

Back 21

a marketplace where brokers who are representing investors meet to buy and sell securities

Front 22

floor brokers

Back 22

people who buy and sell stocks on the exchange

Front 23

specialists

Back 23

the brokers to the floor brokers

Front 24

auction market

Back 24

where buyers and sellers are brought together to trade securities

Front 25

OTC market

Back 25

a network of brokers who buy and sell the securities of corporations that are not listed on a securities exchange

Front 26

bull market

Back 26

a prolonged period of rising stock prices and a general feeling of investor optimism

Front 27

bear market

Back 27

a prolonged period of falling stock prices and a general feeling of investor pessimism

Front 28

leverage

Back 28

the use of borrowed money to buy securities

Front 29

speculator/day trader

Back 29

buy and sell stock within a short period of time

Front 30

margin call

Back 30

the investor must pledge additional cash or securities to serve as collateral for the loan

Front 31

short selling

Back 31

selling stock borrowed from a broker that must be replaced at a later time

Front 32

stock split

Back 32

an increase in the number of outstanding shares of a company's stock

Front 33

dollar-cost averaging

Back 33

technique that involves the systematic purchase of an equal dollar amount of the same stock at regular intervals

Front 34

direct investment

Back 34

buying stock directly from a corporation

Front 35

dividend reinvestment

Back 35

using dividends previously earned on the stock to buy more shares

Front 36

ticker symbol

Back 36

the stock's abbreviated name