Due to the nature of the markets at the moment, there is a lot of confusion when researching and talking about your portfolios and exchange traded fund(ETF) investments.
Nilus Mattive for Money and Markets has some clear-cut definitions for some commonly misunderstood stock market terms:
- Beta: Beta is the measure of volatility of a stock relative to the general stock market. Analysts come from the position that the market has a beta of one and cash has a beta of zero. If a single stock has a beta above one, the stock may go through swings greater than those of the market. Contrary to popular thought, many investors equate beta with risk.
- Market Breadth: This is the measure of how many companies within an index or market have gone up versus how many have gone down. It is either measured in a negative or positive scale. The majority rules in this case.
- Limit Order: A limit order is a very specific instruction for your broker. Simply, to buy the predetermined number of shares at a certain price-or better. It is different from market order in that this means buying the shares no matter what the price. This is good instruction for speed.
- Same-Store Sales: This measures stores results that have been open for a year or more. The goal is to find out how much more product a company is selling from existing stores, not recent additions.
- Fiscal Year: This stems from the business calender, for reporting sales results. Around one quarter of businesses prefer to end their years on a month other than December. For example, a store may choose to end the year in January, in order to include all of the holiday sales in the report. This is handy to know so you can look out for quarterly earnings releases and dividend payment announcements.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.