The Basic Definitions of Stock Investing

Here’s a short list of the terms I use often, these basic terms are most of what I use to value a stock before purchasing.

Bear Market – A market which stocks are falling over 20% (declining market, markets that are low valued compared to a bull)

Bull Market – A market which stocks are rising/growing (good times)

ETF – Exchange traded fund, a group of stocks under one ticker symbol

Ticker – Example, FL (footlocker), DIS (disney), etc. (basically code for stock lookup)

REIT – Real Estate Investment Trust are stocks which are funded through real estate investments, rental income, etc (good to get into if you want to get into real estate without worrying about renters, renovations, etc)

RSI – Relative Strength Index (is an indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions) (generally oversold is above 70 and undersold is under 30, if your time frame matches favorable there is a good chance it’s a good time to buy

MACD – Moving Average Convergence Divergence is a trend following indicator which shows to moving averages of a stocks price

Earnings Report – A companies financial statement on earnings in a specific time frame

Dividend – A sum of money paid to the shareholders by companies through profits (usually annually, bi-annually, quarterly, or monthly)

P/E Ratio – is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

52 week high/low – A shares price high or low during a 52 week period (good way to value share price if the other indicators/research are favorable)

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