Glossary of Investing Terms

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z



A

Arbitrageurs
These investors buy large volumes of stock in 
a target company in the hope that an initial  
takeover bid will be raised or another party  
will make a higher offer. They are short-term 
holders looking for a quick profit and dump   
their shares if an offer lapses or is         
withdrawn.                                    


B


C

Cash Cow
A description of a profitable business, often 
generating a cashflow requiring little effort.

Churning
Excessive trading of a client's account by a  
broker, generating large brokerage fees and   
reducing the client's portfolio value.        


D


E


F


G

Gratis
Free. Offered without charge or other         
consideration.                                


H


I

Interim Report
A financial report that covers part of a year.
Interim reports often lack the detail of an   
annual report and are usually intended as a   
shareholder update.                           


J

Junk Bond
A bonds that pays a high yield to compensate  
for a high risk factor.                       


K


L

Leveraged Buyout
The purchase of a company using borrowed      
finance that is largely secured by the assets 
of the company being purchased.               


M


N


O


P

Portfolio
All the shares, bonds, and other securities   
held by an individual or institutional        
investor.                                     

Preference Shares
A share in a company that has preference over 
common stock for the payments of dividends and
in the distribution of assets in the event of 
the company being wound up.

Promissory Note
A promise in writing to pay a particular      
amount by a certain date to either the bearer 
or a specified party.                         

Pro rata
In proportion.                                

Proxy
The empowerment to vote the shares of someone 
else at a meeting of shareholders.            

Public Offering
The sale of shares to investors.              


Q


R

Return on Investment (ROI)
Income expected to made from an investment.   

Revenue
Income, money made from all sources.          


S

Seed Money
Initial capital raised to start a company or  
venture.                                      

Solvency
The ability of a company to meet its          
obligations as they become due. It is illegal 
for directors to allow a company to trade     
while insolvent.                              

Speculation
Investment in a company in the hope of making 
a profit, "penny dreadful" stocks are often   
speculated on by investors hoping for a big   
share price rise upon hoped for good news.    

Stock
Shares representing the capital of a company. 

Stock Option
The right to buy or sell a stock at a certain 
price within a specified time period.         

Stock Split
A way of increasing the number of shares on   
issue without diluting the shareholdings of   
existing shareholders. Each share is replaced 
with two or more shares that together are     
worth the same as the original share. Stock   
splits tend to increase trading because it    
increases the number of shares available for  
trading.                                      


T

Treasury Stock
Shares of a company's stock that have been    
bought back by the company.                   


U

Unsecured
A loan or debt that has no asset pledged as   
collateral for payment. Unsecured loans       
usually have higher interest rates to balance 
the higher risk of non payment.               


V

Venture Capital
Money loaned or invested to start a business. 


W


X


Y


Z