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Glossary*

Annuities/Annuitization
Yearly allowance, pension or income

Appreciation
Increase in the value of an asset

Assets
Cash, property and investments along with anything else which are controlled by the entity and can be of value for an individual or business.

Bonds
Are debt issued by governments, public or private companies, which bear the obligation of the emitter to repay the principal and interest over a fixed period. Bonds are traded like other securities.

CANSLIM
It is a formula to invest. The founder of Investor’s Business Daily William J. O’Neil created it. This formula is like a recipe. Each letter of this word represents criteria that must be met by a company before it is purchased. CANSLIM incorporates fundamental and technical analysis. This system is based on the study of the most common characteristics that a stock had before they went up in price.

Capital
“Fixed capital” refers to goods such as buildings, plant, machinery (or investment in those), whereas “circulating capital” means stockpiles of material, semi-finished goods and components that are usually used up rapidly in production.

Capital Gains
The gain from the sale of  an investment.


CD
A CD (Certificate of Deposit) is a debt instrument, issued by a bank, which pays interest periodically (every month, every three months etc), or at the established maturity date (in this case, in addition to the principal amount).

Compound Interest
Interest which is calculated not only on the initial principal but also the accumulated interest of prior periods.

Dividends

Payments made by a company to its shareholders from the company’s earnings. Usually dividend-paying stocks come from large well-established companies.

Dow Jones
Stock market index of 30 of the biggest US companies.

Dollarization
The act of introducing the US Dollar as a  currency  in a country.

Escrow Accounts
Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party.

Globalization
Development of extensive worldwide patterns of economic relationships between nations.

Gross Domestic Product (GDP)
Total market value of the goods and services produced by a nation's economy during a specific period of time.

Indices
Benchmark: Dow Jones (30 of the biggest companies) or S&P 500 (500 companies of all sizes and industries).

Interest
The cost of borrowing or lending money, usually a percentage of the amount borrowed or loaned.

ITI Investment Calculator
Calculator to check how much calculated annualized return can compound over time. Compares it with what one get when you invest in low percentage return alternatives. Check this and other useful calculators on http://stockletter.tv/ITIcalculators.htm.

Long-Term
Held over one year.

Lump-Sum
Total sum.

Macroeconomics
Microeconomics studies how individuals and businesses make decisions and how these decisions affect the prices and output of goods and services. In contrast, macroeconomics is the study of aggregates of individuals, prices and output for whole markets.

Market
A means by which the exchange of goods and services takes place as a result of buyers and sellers being in contact with one another, either directly or through mediating agents or institutions.

Maturity
The date when the principal amount of a security becomes due and payable. An issue can have multiples maturities.

Moore's Law
Law that determines that the data storage ability of a microchip is doubled once a year (or once every year and a half).

Mortgage Rates
in Anglo-American law, any of a number of related devices in which a debtor (mortgagor) conveys an interest in property to a creditor (mortgage) as security for the payment of a money debt.

Portfolio
The group of investments held by an investor.

Premium
The price paid by the buyer to purchase an option. Prices are determined by “open outcry” in the pits.

Principal
The basic element of the loan as distinguished from interest and mortgage insurance premium. In other words, principal is the amount upon which interest is paid.

Recession
In economics, a downward trend in the business cycle characterized by a decline in production and employment, which in turn causes the incomes and spending of households to decline.

Return
Profit

Risk
In economics and finance, an allowance for the hazard (risk) or lack of risk in an investment or loan. Default risk refers to the chance of a borrower's not repaying a loan.

Risk aversion
This concept refers to the fact that individuals are willing to pay money (or not to receive a high return) to avoid playing a risky game, even when the expected value of the game is in their favor.

Security
An investment that is represented by a negotiable document by a corporation or governmental entity for the purpose of raising capital like bonds, stocks, mutual funds.

Short-Term
Held for one year or more. 


S&P 500
This index also known by its options ticker symbols SPX, measures the overall change in the value of the 500 stocks of the largest firms in the U.S. (The breakdown between industrial, transportation utilities and financial firms fluctuates depending on the market).

Wire Transfer
A wire transfer is an automated electronic transfer between two bank accounts in 2 banks that have an established agreement. The bank has to be part of the Federal Reserve System in the USA. Practically every bank in any country is part of this network, at least through a third party partner bank. For instance, Banco de Merida has a bank account with Chase Manhattan to send and to receive wire transfers.

* This glossary is strictly for TheInvestor.tv. You can find a detailed glossary @Yahoo.

 “What makes the desert beautiful is that somewhere it hides a well”.
Antoine de Saint-Exupery

 

 

 

 

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