07 · Terms
The Lexicon
Plain-language definitions. The working vocabulary of investing, one term at a time, without the jargon tax.
Bear Market
A bear market is a sustained decline in broad market prices of roughly 20% or more from a recent peak, typically accompanied by widespread pessimism.
Bond
A bond is a loan an investor makes to a government or company, which promises to pay periodic interest and return the original principal on a set maturity date.
Book Value
net asset valueBook value is a company's total assets minus its total liabilities, representing the accounting net worth on its balance sheet, often expressed per share.
Bull Market
A bull market is a sustained period of rising prices in a broad market, generally understood as a rise of 20% or more from a prior low, often coinciding with investor optimism.
Diversification
Diversification is spreading investments across different assets, sectors, or geographies so that a poor outcome in any one holding has a limited effect on the overall portfolio.
Dividend
A dividend is a cash payment — occasionally paid in additional shares instead — that a company distributes to its shareholders out of its profits, usually on a quarterly basis.
Dividend Yield
yieldDividend yield is a stock's annual dividend payment divided by its current share price, expressed as a percentage, showing the cash return an investor receives relative to price paid.
Dollar-Cost Averaging
DCADollar-cost averaging is the practice of investing a fixed amount of money at regular intervals, regardless of price, so that more shares are bought when prices are low and fewer when prices are high.