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General Investing Terms

Smart Finance

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I have started to compile many of the investing terms we come across when investing, which many confuse beginners or those who are starting to learn about investing. This table gives the name, abbreviation and a little note of the meanings. There are links on the names so anyone who wishes can look into the terms more.

NameAbbreviationNote
American Depositary ReceiptADR
Asset Turnover RatioSales/revenue relative to value of assets.
Assets Under ManagementAUMTotal market value of investments.
AlphaαInvestments ability to beat the market.
BetaMeasure of volatility compared to total market.
Bull MarketTotal market price rise or expected to rise.
Bear MarketTotal market price falls or expected to fall.
Consumer Price IndexCPIAverage price of a basket of consumer goods & services.
Current RatioA company's ability to pay short term obligations.
Capital ExpenditureCapExFunds used to acquire, upgrade or maintain physical assets.
Closed-End FundCEFFixed issue shares, Different than OEIC
Debt-To-Equity RatioD/EHow a company finances its operations through debt Vs wholly owned funds.
Dividend YieldThe yield of dividend payout/stock price.
Dividend Payout RatioHow much of earnings paid out as a dividend.
Earnings Per ShareEPSHow much a company makes for each of its stock.
Earnings Before Interest, Taxes, Depreciation and AmortizationEBITDAMeasurement of the profitability without the cost of capital investments.
Enterprise ValueEVA company's total value.
Economic MoatAdvantage over other companies.
Ex-DividendDay without dividend.
Exchange Traded FundETFA security that is traded like a stock.
Generally Accepted Accounting PrinciplesGAPPA procedure which companies must follow.
Gross Profit MarginMoney left over from product sales.
Index FundTracks a market index (S&P 500).
Initial Public OfferingIPOA new company issuing stock on an exchange.
Master Limited PartnershipMLPBusiness venture in the form of a public traded limited partnership.
Net worthThe value of assets minus liabilities.
Net Asset ValueNAVFund/Company's total assets less its liabilities.
Net Profit MarginNet income generated as a percentage of revenues received.
Operating MarginHow efficient a company is able to generate profit.
Over-The-CounterOTCProcess of trading companies which are not listed on formal exchanges.
Open Ended Investment CompanyOEICCan create new shares to meet investors demands & cancel shares of investors who exited.
Price-To-EarningsP/EShare price to its earnings per share.
Price/Earnings-To-GrowthPEGEnhances P/E ratio by adding expected growth.
QuarterQ1,2,3,4A quarter is a three month period on a company's financial calendar.
Quarter On QuarterQOQChange in performance between fiscal quarters.
Real Estate Investment TrustREITA company which owns, operates or finances properties.
Return On AssetsROAHow a company Utilizes assets profitability.
Return On EquityROEProfitability in relation to stockholders equity.
Return On Invested CapitalROICReturn above the cost of debts and equity capital.
Return On InvestmentROIHow well an investment has performed.
Total Expense RatioTERA fund's operating costs relative to assets.
Trailing 12 MonthsTTM12 consecutive months of a company's performance data.
Year-Over-YearYOYEvaluating two or more years as one event.
Year To DateYTDReferred to the period beginning the first day of the current calendar year.
Yield On CostYOCDividend yield based on original price paid for the investment.
 
Last edited:

Ardgour

Rookie Investor
Mar 16, 2021
80
91
662
North East Scotland
I have started to compile many of the investing terms we come across when investing, which many confuse beginners or those who are starting to learn about investing. This table gives the name, abbreviation and a little note of the meanings. There are links on the names so anyone who wishes can look into the terms more.

NameAbbreviationNote
American Depositary ReceiptADR
Asset Turnover RatioSales/revenue relative to value of assets.
Assets Under ManagementAUMTotal market value of investments.
AlphaαInvestments ability to beat the market.
BetaMeasure of volatility compared to total market.
Bull MarketTotal market price rise or expected to rise.
Bear MarketTotal market price falls or expected to fall.
Consumer Price IndexCPIAverage price of a basket of consumer goods & services.
Current RatioA company's ability to pay short term obligations.
Capital ExpenditureCapExFunds used to acquire, upgrade or maintain physical assets.
Debt-To-Equity RatioD/EHow a company finances its operations through debt Vs wholly owned funds.
Dividend YieldThe yield of dividend payout/stock price.
Dividend Payout RatioHow much of earnings paid out as a dividend.
Earnings Per ShareEPSHow much a company makes for each of its stock.
Earnings Before Interest, Taxes, Depreciation and AmortizationEBITDAMeasurement of the profitability without the cost of capital investments.
Enterprise ValueEVA company's total value.
Economic MoatAdvantage over other companies.
Ex-DividendDay without dividend.
Exchange Traded FundETFA security that is traded like a stock.
Generally Accepted Accounting PrinciplesGAPPA procedure which companies must follow.
Gross Profit MarginMoney left over from product sales.
Index FundTracks a market index (S&P 500).
Initial Public OfferingIPOA new company issuing stock on an exchange.
Master Limited PartnershipMLPBusiness venture in the form of a public traded limited partnership.
Net worthThe value of assets minus liabilities.
Net Asset ValueNAVFund/Company's total assets less its liabilities.
Net Profit MarginNet income generated as a percentage of revenues received.
Operating MarginHow efficient a company is able to generate profit.
Over-The-CounterOTCProcess of trading companies which are not listed on formal exchanges.
Price-To-EarningsP/EShare price to its earnings per share.
Price/Earnings-To-GrowthPEGEnhances P/E ratio by adding expected growth.
QuarterQ1,2,3,4A quarter is a three month period on a company's financial calendar.
Quarter On QuarterQOQChange in performance between fiscal quarters.
Real Estate Investment TrustREITA company which owns, operates or finances properties.
Return On AssetsROAHow a company Utilizes assets profitability.
Return On EquityROEProfitability in relation to stockholders equity.
Return On Invested CapitalROICReturn above the cost of debts and equity capital.
Return On InvestmentROIHow well an investment has performed.
Total Expense RatioTERA fund's operating costs relative to assets.
Trailing 12 MonthsTTM12 consecutive months of a company's performance data.
Year-Over-YearYOYEvaluating two or more years as one event.
Year To DateYTDReferred to the period beginning the first day of the current calendar year.
Yield On CostYOCDividend yield based on original price paid for the investment.
Thanks for this. One area I get confused with are the different types of fund class.. which I guess is one reason why I am biased towards investment trusts. And on that note you could add to list OEIC as well as the CEF (which some will be aware of post Neil Woodford)
 

Smart Finance

Administrator
Staff member
Moderator
Feb 23, 2021
692
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gumroad.com
Thanks for this. One area I get confused with are the different types of fund class.. which I guess is one reason why I am biased towards investment trusts. And on that note you could add to list OEIC as well as the CEF (which some will be aware of post Neil Woodford)
Great shout, i shall add these in! I remember the Woodford fiasco, i luckily sold out before it crashed down, my dad on the other hand has some money stuck in there. Its quite a story and definitely something we should learn from. I wonder how many people have heard of Neil Woodford, could make for a good write up.
 

Ardgour

Rookie Investor
Mar 16, 2021
80
91
662
North East Scotland
Great shout, i shall add these in! I remember the Woodford fiasco, i luckily sold out before it crashed down, my dad on the other hand has some money stuck in there. Its quite a story and definitely something we should learn from. I wonder how many people have heard of Neil Woodford, could make for a good write up.
We avoided Woodford’s main fund but are losing on the patient capital trust now run by Schroders...it might come good. One day...
 
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Smart Finance

Administrator
Staff member
Moderator
Feb 23, 2021
692
409
3,887
gumroad.com
We avoided Woodford’s main fund but are losing on the patient capital trust now run by Schroders...it might come good. One day...
That whole Woodford situation made us remember lots of lessons we can learn from. From star fund manager to disgraced is a long way to fall. I think I remember an article saying he was moving to China/Asia to set up another fund at one point.
 

J.Stalling

New member
Jul 27, 2021
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There are so many abbreviations when first starting, this is a great list to keep in reference
 

Gandalf

New member
Apr 19, 2021
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Thats incredible. It will be very helpful for me. Definitely will keep it for reference.
 

investiumapp

New member
Aug 5, 2021
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academy.investium.app
This is such a great tool! We have compiled some of these terms in a blog article that gives a little broader explanation that can be helpful as well... Especially for beginner investors. Hope this helps!
 
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Reactions: Smart Finance

Smart Finance

Administrator
Staff member
Moderator
Feb 23, 2021
692
409
3,887
gumroad.com
This is such a great tool! We have compiled some of these terms in a blog article that gives a little broader explanation that can be helpful as well... Especially for beginner investors. Hope this helps!
I like how you've managed to explain some of these terms simply for people to understand.