Stocks And Bonds

Index Fund

A collection of stocks, representative of the Stock Market

Stocks

A claim of ownership on a company.

Preferred stocks

A type of stock that gives shareholders preference in dividends and during liquidation.

Common Stocks

A type of stock that represents ownership in a company and typically allows shareholders to vote on corporate matters and receive dividends.

Primary Markets

Where stocks are first issued and sold for the first time.

Secondary Markets

Investors trade previously issued stocks

IPO

Initial Public Offering, is when a stock is directly purchased from the company, is sold in the primary market.

Factors that affect stocks

Company News, Economic conditions, quarterly earnings reports, supply and demand, follow the leader, are all factors that influence stock prices

P/E Ratio

The P/E ratio (Price-to-Earnings ratio) is a valuation metric used to assess the relative value of a company's stock. It is calculated by dividing the current market price of the stock by its earnings per share (EPS)

Low P/E ratio

Stock price is undervalued or the compnay is in a mature industry

High P/E Ratio

The stock price may be overvalued or the company is growing rapidly

Bearish Market

the economy is doing bad and a recession is comming

Bullish market

The economy is performing strong and stock prices are rising

Operational efficiency

How well a company uses resources to generate profits, with minimal waste.

Informational efficency

A market condition where asset prices accurately reflect all available information, leading to fair valuations.

Municipal Bonds

Bonds issued by state or local governments to fund public projects, often tax-exempt.

Corporate Bonds

Bonds issued by companies to raise capital, typically offering higher yields than government bonds.

Junk Bonds

Low credit rating bonds that are high risk of default, but also have a high return

Stock Brokers

People you can buy stocks through

Capital gains

When you sell your stock for more than what you paid for it.