INVESTMENT PLANNING Flashcards
– is stock in a company which comes with voting rights and an opportunity to share in the profits of the company.
COMMON STOCK
is a special type of company stock which brings additional benefits.
PREFFERED STOCK
is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
BONDS
is a common method used to calculate the intrinsic value and growth of a publicly traded company as compared to others in the market. It is often used to base investing decisions on for both institutional investors and private investors.
PRICE-TO-EARNING RATIO
is an equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies that sell discretionary items consumers can afford to buy more of in a booming economy and cut back on during a recession.
CYCLICAL STOCK
is usually refer to stocks that move in opposition to the market. They are important in achieving a diversified portfolio, as they help balance out earnings in any type of market.
COUNTER CYCLICAL STOCK
are securities that provide a consistent flow of dividends to the investor.
INCOME STOCKS
are those expected to grow in value at a rate higher than what the average market is doing.
GROWTH STOCKS
is a stock that tends to trade at a lower price relative to its fundamentals (e.g., dividends, earnings and sales) and thus considered undervalued by a value investor.
VALUE STOCKS
is any type of stock option where the degree of risk associated with the shares is considered out of balance with the rate of return that can reasonably be associated with the investment.
SPECULATIVE STOCKS
get their name from poker a game in which the blue chips are considered to be the most valuable.
BLUE CHIP STOCKS
is calculated by multiplying the number of a company’s shares outstanding by its stock price per share.
MARKET CAPITALIZATION
