10 investing terms that you need to know

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1. Dividend

A portion of a company's earnings is given to the shareholders. You need to own the stock to get the percentage. It’s a reward for holding a stock.

2. Beta

The measure of a stock's volatility is related to the market.

3. Volatility

The rate of when a stock increases or decreases over some time.

4. Bull/Bear Market

A bull market means an up trend and on the other hand, a bear market means a downtrend.

5. Yield

Earnings are produced in an investment over time.

6. Earnings per share (EPS)

EPS shows how much money it makes per share.

EPS = Net income -Prefered Dividend / Average Shares Outstanding

7. Price/Earnings ratio (P/E)

It tells the investors how much a company is worth. P/E = Stock price/ EPS

8. Initial public offering

When a private company becomes public by selling its shares.

9. Profit Margin

The percentage of the money made from each sale. Let's say you sell a 10-dollar product and make it for 5 dollars. This is a 50% Profit margin.

10. Liquidity

The amount of cash available after selling all your assets. The speed of turning your assets into money.

  • Revenue — The total amount of income generated by the company from sales
  • Earnings — money made from goods or services