A prospectus, obtained by contacting the investment company or your broker, contains this and other important information about an investment company. On-screen text: Disclosure: Carefully consider the investment objectives, risks, charges, and expenses before investing. This means you own a small piece of this company. Narrator: Stocks are shares of ownership in a company. On-screen text: Disclosure: Stock trading involves high risks, and you can experience a significant loss of funds invested. Some common equities are stocks, mutual funds, and exchange-traded funds. Let's define each.Įquities typically refer to owning shares in a company. These asset classes are equities, fixed income, derivatives, and cash. There are four main types of investments, or asset classes, someone can invest in. In addition to market terms, it's important to understand the different types of investments that can be made. An easy way to remember the market direction is to picture these animals in battle.Ī bull in battle drives his horns upward to gorge the attacker, so a "bull market" means that stocks or other investment prices are going up.Ī bear in battle swats his paws downward, so a "bear market" means that prices are trending down. This refers to the direction the market is heading-up or down. People also refer to the market as being bullish or bearish. This might be a physical place, such as the New York Stock Exchange or an electronic gathering spot like Nasdaq. The word market can be confusing because it can refer to investing in general or a specific index, like the S&P 500 ®.Ī market simply means a place where buyers and sellers can get together to make transactions. Let's start with terms associated with the market. ![]() We'll briefly define a few common terms related to the market, investment types, portfolios, and trading. Learning the lingo can help you communicate with others in finance and take better control of your investments. Narrator: The investing world can be difficult for beginners because the lingo isn't always self-explanatory, and many terms overlap.
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