Investment Dictionary

Investment terms and their definitions.

23 articles in this collection
Written by Muhammad Azeem

- A -

Alpha

A measure of the active return on an investment, the performance of that investment compared with a suitable market index.

Written by Muhammad Azeem
Updated over a week ago

Annualize

A procedure where figures covering a period of less than one year are extended to cover a 12-month period.

Written by Muhammad Azeem
Updated over a week ago

Appreciation

The increase in the value of an asset over time.

Written by Muhammad Azeem
Updated over a week ago

- B -

Benchmark

A standard against which the performance of an individual security or group of securities is measured.

Written by Muhammad Azeem
Updated over a week ago

Beta

A measure of the risk arising from exposure to general market movements as opposed to idiosyncratic factors.

Written by Muhammad Azeem
Updated over a week ago

Blue Chip

A stock in a corporation with a national reputation for quality, reliability, and the ability to operate profitably in good and bad times.

Written by Muhammad Azeem
Updated over a week ago

Breakpoint

A point in mutual funds at which the amount invested reduces the sales charge.

Written by Muhammad Azeem
Updated over a week ago

Bull

A stock market speculator who buys a holding in a stock in the expectation that in the very short-term it will rise in value.

Written by Muhammad Azeem
Updated over a week ago

- C -

Cut-off Time

A period in a day after which no transactions are accepted for that trading day.

Written by Muhammad Azeem
Updated over a week ago

- D -

Diversification

The process of owning different investments in order to reduce the effects of volatility in a portfolio.

Written by Muhammad Azeem
Updated over a week ago

- E -

Earnings Per Share (EPS)

The monetary value of earnings per outstanding share of common stock for a company.

Written by Muhammad Azeem
Updated over a week ago

- G -

Growth Stock

A stock of a company that generates substantial and sustainable positive cash flow than the average company within the same industry.

Written by Muhammad Azeem
Updated over a week ago

- I -

Index

A measurement of a section of the stock market.

Written by Muhammad Azeem
Updated over a week ago

Investment Fund

A way of investing money alongside other investors.

Written by Muhammad Azeem
Updated over a week ago

- L -

Liquidity

A market's feature whereby an individual or firm can quickly purchase or sell an asset.

Written by Muhammad Azeem
Updated over a week ago

- P -

P/B Ratio

A ratio used to compare company's market price to its book value.

Written by Muhammad Azeem
Updated over a week ago

P/E Ratio

The ratio of a company's share (stock) price to the company's earnings per share.

Written by Muhammad Azeem
Updated over a week ago

- R -

Recession

A business cycle contraction when there is a general decline in economic activity.

Written by Muhammad Azeem
Updated over a week ago

Risk Aversion

The behavior of humans who, when exposed to uncertainty, attempt to lower that uncertainty.

Written by Muhammad Azeem
Updated over a week ago

- S -

Sharpe Ratio

A way to examine the performance of an investment by adjusting for its risk.

Written by Muhammad Azeem
Updated over a week ago

Standard Deviation

A measure to quantify the amount of variation or dispersion of a set of data values.

Written by Muhammad Azeem
Updated over a week ago

- T -

Turn-Over Ratio

The percentage of the portfolio's holdings that have been replaced in a given year.

Written by Muhammad Azeem
Updated over a week ago

- V -

Valuation

A process to determine the present value of an asset.

Written by Muhammad Azeem
Updated over a week ago