More Dividends is on a quest to help educate everyone on the benefits of dividend investing. One of the fundamental places that every new investor has to start is by learning the jargon of investing. Here will be a aggregate of terms that are important for investors to know. Plus I will be writing in depth articles about the different terms.
Ask – is the lowest price a seller is willing to accept for a stock.
Bear – is an investor who believes the whole market or an individual companies stock will decline.
Bear Market – is when a market makes a 20% pull back from its highs and begins trending downward.
Bid – is the highest price a buyer is willing to accept for a stock.
Blue Chip – a company that has solid earnings, growing dividends and a good balance sheet. They would be considered a safer investment.
Book Value – is the value of a company if all liabilities were subtracted from total assets.
Bull – is an investor who believes the whole market or an individual companies stock will rise.
Bull Market – is when the market is continuing to trend upward.
Diluted Earnings Per Share (EPS) – is the amount of shares outstanding plus any that may be owed through options.
Dividend – is a payment from the company to it’s shareholders.
Dividend Reinvestment Plan (DRIP) – is a strategy where you allow you dividends to be reinvested into more shares of the company stock.
Earnings Per Share (EPS) – is the amount of earnings the company produced compared to the shares outstanding.
Employee Stock Purchase Plan (ESPP) – is a plan offered by your employer which would allow you to purchase shares of company stock through deductions from your paycheck.
Market Cap – is the value of the company based on it’s current share price.
Payout Ratios – is the amount of cash that a company pays out as dividends compared to the earnings that they produce
P/E Ratio – is the price to earnings ratio.
Spread – is the difference between the ask and the bid
Volume – is the amount of stock that was traded
Yield – is the percentage of the price of the dividend divided by the stock price
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