The new investor’s glossary: A to B

Fsp Invest, 03 Dec. 2013

Tags: glossary, new investor’s glossary, investing, introduction to investing, terminology, investing terminology

When you’re new to investing, with the excitement of buying your first share comes a lot of new terms. These can be confusing when you first come across them. But the majority of the time, they describe something simple. Read on to uncover A to B…

There is a lot of terminology that comes with investing, the research team at Red Hot Penny Shares explains. It’s worthwhile getting to grips with as much of it as you can as you pursue your investing career.

Investing terminology

Read on to find out the terms you need to know about from A to B...

Advisory broker: This is a stockbroker who offers investment advice, but leaves the final investment decision to you.

AltX: This is the Alternative Exchange of the JSE. The aim of the AltX is to making listing for small companies easier.

Ask: This is the price at which a dealer or stockbroker will sell you shares or derivatives.

Balance sheet: The balance sheet is a summary of all the company’s assets and liabilities on a certain date. The balance sheet is included in a company’s annual reports/financial statements.

Bear: An investor who thinks the market will go down.

Bear market: A market where the main market index is falling.

Bid: Offer to buy a share at a certain stated price.

Bid offer spread: The difference between the bid and offer price.

Blue chip: This describes ordinary shares of well-established companies with a high market capitalisation.

Bonds: Governments and government-sponsored bodies issue these. This includes Eskom and leading municipalities. They pay a fixed rate of interest. Some companies also issue corporate bonds to raise additional capital.

Bourse: A generic name for the stock exchanges of continental Europe.

Broker: The shortened form for stockbroker.

Brokerage: This is the commission charged by a broker for the purchase or sale of shares.

Broker’s note: A contract note that a broker must send to a client, which records the details of a purchase or sale of securities. It includes the commission payable, the basic charge, the marketable securities tax and the settlement period. Stockbrokers must send or email broker’s notes within 24 hours of the transaction.

Bull: An investor who thinks the market will go up.

Bull market: A market where the main market index is rising.

So there you have it, the A to B of the new investor’s glossary.

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