Investing Terms You Need to Know

Anyone who is thinking about investing, whether it be in the form of mutual funds or an entrepreneurial business venture needs to get acquainted with the various essential investment terms. This is important because the world of investing can become more complicated that it has to be if you go in without no clue about even the most basic investment terms, especially because you will be hearing a lot of them once you start investing.

Typical investment terms that you need to familiarize yourself with include terms like ask, bear, bull, broker, market capitalization, stock, and many more. "Ask" refers to the lowest price that is given for a particular stock. A "bear market" is a market that is expected to decline, while a "bull market" is a rising market, where stocks are expected to go up. "Blue chip companies" refer to those that have marked solid earnings for a certain period of time, such as Coca Cola, Gillette, Hershey’s, McDonalds, and other companies with good financial reputations. Stocks are referred to shares of ownership for a particular company, while dividends are the amount paid to shareholders of the company on a quarterly or annual basis.

There are many investment terms that you will need to know, although you can rest easy since most terms you will know once you start hearing about how they apply to you and your investment. A basic knowledge, however, is still important before you start on any investment in order to avoid confusion and to understand your broker once you get into a discussion about your portfolio.