A Crash Course in Investing Vocab to Impress Your Folks – Lesson two
Now that you’ve got a couple of phrases under your belt from lesson one, let’s move on to some new jargon to unlock your inner finance bro!
Bear market
Unfortunately, not the cuddly kind🐻… A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. When things take a sharp downturn with neg vibes and pessimism in the air you might have a bear market on your hands. They can also be associated with an economic downturn such as a recession. It is the opposite of a bull market.
In a sentence: “The bear market is such a bummer, I hope things improve next quarter”.
Bull market
On the flipside, any market in which prices are advancing in an upward trend is known as a ‘bull market’. It is most often used to refer to the stock market but can be applied to anything that is traded, like bonds, real estate, currencies, or commodities.
In a sentence: “Oh my god, the bull market has totally made my year.”
Large-cap
When you’re not ordering a big, foam-topped coffee, large-caps refer to listed companies with market values over $10 billion. Most of the best-known companies in the world are large caps, and these are typically the companies that have established themselves as the leaders in their industries.
In a sentence: “My dad only invests in large cap stocks but I’m open to the little guys too.”
Diversification
Diversification is when you spread your investments across a range of assets to try to reduce investment risk. Often people will seek out investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio, and also increase the potential for increasing returns.
In a sentence: “I had all my investments in crypto but I diversified by investing stocks and real estate.”
NASDAQ
The NASDAQ Stock Market is an American stock exchange designed to enable investors to buy and sell stocks on an automatic, transparent and speedy computer network. It is the world’s first and second-largest electronic exchange. It is an acronym for; National Association of Securities Dealers Automated Quotations system, which is owned and operated by the FINRA.
In a sentence (pronounced naz·dak): “I invested in Apple on the NASDAQ but not Amazon because Bezos is a douche.”
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