Shares (Stock)

A part of the property of a company that represents ownership in the company.

Stock Market

A market where shares are traded.

Stock Index (Stock Index)

A set of shares used to measure the general direction of the market.

Active Investing (AII)

An investment strategy that seeks to outperform market returns through active trading.

Stock Exchange

An organisation that allows trading in shares.

Deflation

Overall decline in prices over time.

Dividend

The share of the company's profits paid to shareholders.

Dollar cost averaging (DCA)

Regular, fixed-amount investments regardless of market prices.

ETF (Exchange-Traded Fund)

An exchange-traded fund that replicates a particular index or asset. Read more ‘ETFd‘.

Retail Investor (Retail Investor)

An individual who invests their own money.

Initial Public Offering (IPO)

Initial public offer of the company's shares on the stock exchange. Read more in our article ‘What is an IPO? A comprehensive guide to the initial public offer: processes, pricing and participation strategies’'.

Leverage

Use of borrowed funds to increase investments.

Diversification (Diversification)

Allocating investments between different assets to reduce risk. Read more from the article ‘Diversification of investments: the road to a more secure future’.

Inflation (Inflation)

Overall price increases over time.

Mutual Fund (Mutual Fund)

A fund that pools money from several investors and invests it in different assets.

Investment Manager (Asset Manager)

A professional who manages an investment portfolio.

Co-financing (Co-financing)

The participation of several investors in the financing of an investment.

Co-financing (Crowdfunding)

Raising capital from several small investors.

Capital Gain

Gains on the sale of assets when the sale price exceeds the purchase price.

Capital Loss (Capital Loss)

Losses on the sale of assets if the sale price is lower than the purchase price.

Liquidity

The ability to quickly and easily monetise assets.

Economic Cycle (Economic Cycle)

Periodic change in economic activity.

Put Option

The right, but not the obligation, to sell an asset at a fixed price in the future.

Nominal Value (NPV)

The value of assets that does not take inflation into account.

Net Owner's Equity (Owner's Equity)

The value of assets less liabilities.

Call Option (Call Option)

The right, but not the obligation, to buy property at a fixed price in the future.

Passive Investing (PI)

An investment strategy that tries to mimic market returns.

Principal Investor (Institutional Investor)

A large investor, such as a pension fund or insurance company.

Portfolio

The pool of investments held by an investor.

P/E ratio (Price-to-Earnings Ratio)

The relationship between a company's share price and its profits.

Real Value

The value of assets that take account of inflation.

Time Value of Money (TVM)

The concept that the value of money changes over time.

Risk (Risk)

The potential loss or fluctuation in the return on an investment.

Venture capital

Investment in early stage companies.

Risk-Reward Ratio (RRR)

Ratio between investment risk and potential return.

Shorting

Shares are borrowed and sold immediately, in the hope that their price will fall and they can buy them back later at a lower price, making a profit in the meantime. Read more in our article 'Shorting - an investment strategy for the bold'.

Futures Contract

A contract that commits you to buy or sell an asset at a fixed time in the future at a fixed price.

Return on investment (ROI)

A measure of return on investment, expressed as a percentage.

Production (Return)

Percentage of profit or loss earned on the investment.

Market Capitalization (Market Capitalization)

The total value of the company based on the market price.

Bond (Bond)

A debt instrument where the issuer agrees to pay interest and principal over a specified period. Read more ‘Bonds‘.

Volatility

Fluctuations in the value of an investment over time.