COMMON INVESTMENT TERMS EXPLAINED: Part 15

Welcome back for another round of common investment terms! As always, let us know if you have any questions.

Securities and Exchange Commission (SEC): This is the chief regulatory body over the stock markets and publicly traded companies.

Short Selling: This is where an investor believes a stock is going to fall in price. The investor is able to borrow the stock from another client and then sell it. If the investor is correct, they would then buy the stock at the lower price, keep the difference, and then give the stock back to the person from whom they borrowed it.

Small Cap Stock: This type of stock is any company with a market capitalization of $1 billion or less.

Technical Analysis: A form of stock evaluation that relies on stock data to predict future price trends. Technical analysis does not consider the business itself, but focuses strictly on the numbers, using quantitative data to drive decisions.

Value Stocks: These stocks are underpriced by the market for reasons that have nothing to do with the business itself and are considered to be bargains.

Yield: The annual return of a stock, bond, or any investment expressed as a percentage of its cost.

Thanks for reading! Stay tuned for more terms coming soon.