Investing

An index fund is a type of fund that tries to mirror the performance of a benchmark market index, such as the S&P 500 stock market index. Investors can use a brokerage or retirement account to purchase exchange-traded funds (ETFs) or mutual funds that track indexes.

An inverse ETF, often known as a bear or short ETF, is an exchange-traded fund designed to profit from a market decline. These short-term, publicly traded investments are utilized by investors who believe that a particular market or individual security will lose value in the near future.

Index mutual funds and ETFs give investors a way to invest in different indexes. Investors can look for funds that track international markets, domestic indexes, specific sectors, or meet other criteria.

Spread trading is a strategy of gauging how the price difference between two securities or contracts—the spread—will change. A spread trader is focused more on the price difference and less on the prices themselves.

Put simply, a commodity fund is an investment that focuses on the trade of physical commodities.

A portfolio is a collection of a person’s investments across asset classes, such as stocks, bonds, cash, and real estate. Assets may be owned outright, or they may be subject to a vesting schedule.

Technical analysis is a method of analyzing stocks that studies historical market details and mines data from behavioral economics and quantitative analysis to predict the market’s direction in the future.

A stock market bubble is when share prices climb too far beyond fundamental values. The steep ascent is almost always followed by a sudden plunge.

Price is the main driver behind stock charts. Charts show where a stock is trading at a particular moment compared with where it traded in the past. Investors use this price picture to form an opinion about the stock’s prospects.

Some of the most common ways to diversify a portfolio include diversifying in different asset classes, within each asset class, and in different markets around the world.

Options trading is the buying or selling of options, which have a value apart from that of the underlying shares.

Cyclical stocks are shares of companies whose performance tends to follow the ups and downs of the economy.

A SPAC is a sort of shell company that doesn’t have its own operations, but rather is created to raise money through the sale of shares in an IPO and then use the money to buy an existing company.

A bond is a loan made to a corporation or government entity. Instead of getting funds from a bank or elsewhere, the company or other borrower raises money from investors who buy its bonds.

Fundamental analysis is a method of attempting to determine the intrinsic value of a stock, using publicly available financial information.

Low-float stocks tend to be relatively few in number. Those that are low-float have lower trading volume, less market liquidity, wider price spreads, and more volatility.

The Nasdaq is the second-largest major stock exchange, strongly reflecting the market moves of tech and high-growth companies, including those in biotech and health care.

An investment advisor is a professional or company that provides certain kinds of investment advice to others or issues reports on securities.

There are two primary methods of analyzing stocks: technical analysis and fundamental analysis.

The price of a stock is determined by supply and demand. If more people want the stock than the number of shares available, the price goes up.

Dividends are portions of a company’s earnings that are paid out to shareholders. They might be distributed to a shareholder on a consistent basis or as a one-time payment.

A dividend yield is the financial ratio that measures the percentage a company pays annually per dollar you invest in it.

The most common types of stock orders are market orders, limit orders, and stop-loss orders.

Growth investing is a strategy that centers around building an investor’s capital at an accelerated pace. It focuses on companies, markets, and assets that are expected to appreciate at an above-average rate.