Investment Dictionary

Here is the term commonly used in the investment world capital markets, forex / currency / foreign exchange, stocks, commodities, indexes, and other investments.
A

ALPHA - The difference between actual investment results with the expected investment returns or criterion (benchmark), to the level of market risk (beta) specific. Positive alpha values illustrate that the performance of the investment portfolio is better than previously expected (benchmark). As for positive alpha value indicates that the performance of the investment portfolio is less favorable than its criterion (benchmark).

American Depositary Receipt (ADR) - The certificate that describes the number of shares in a company outside the United States (U.S.), but kept in the bank in the United States with branches in several countries of the world. This certificate can be traded on U.S. exchanges or markets, making it easier for U.S. investors to invest in the shares of companies outside the U.S..

Annuity (annuity) - A bond or contract between investors and insurance companies which, after the purchase contract by the investor, the insurance company guarantees a revenue (yield) a fixed or variable over a certain period regularly.

ASSET ALLOCATION (ASSET allocation) - The investment strategy that allocates (diversification) total assets (portfolio investments) in some groups, such as stocks, bonds and money market instruments, in an attempt to reduce (minimize) the risk of investment.

B
Bearish market - A financial market conditions in certain periods where the price of the securities market is experiencing a decline.

BETA - A measure of fluctuations in individual investment portfolio or investment instruments compared to the market (stock market), represented by the index. Market beta value is 1. Beta more than 1 illustrates that portfolio investment is more volatile than the market or index.

BLUE CHIP - Ordinary shares (common stock) that has a good fundamental performance, as always posted a profit in recent years, have good growth, always
share dividend, has a reputation of good management, and so forth.

STOCK EXCHANGE NEW YORK (NEW YORK STOCK EXCHANGE) - Stock markets in the world's oldest and largest with more than 3000 companies whose shares to be traded.

EXCHANGE (Bourse) - venue for securities trading.

BULL MARKET - The market where the price of securities in the state have increased.

C

CD (CERTIFICATE OF DEPOSIT) - Promissory notes issued by banks and generally provide fixed interest rate (fixed-rate) to the purchaser.

Cost Averaging - A Strategy through the purchase of securities or invest in a certain amount on a regular basis or at specified time intervals. When the prices of the securities has decreased, the number of units purchased more and more while at the market price rises, the fewer the number of units purchased. Overall, the average purchase price will be lower and most likely will be lower than recent market prices and lower than average market price if the purchase dilakuakn not regularly.

D

DERIVATIVES (Derivative) - financial instruments where the value is based on the value of other securities (the underlying security).

DIVERSIFICATION (DIVERSIFICATION) - An investment strategy by placing the funds in the portfolio of investments in various types of securities, hoping it would reduce investment risk.

Dividend - Distribution of keuantungan a company to its shareholders.

DOW JONES INDUSTRIAL AVERAGE (THE DOW) - A measure or stock market performance measures of the oldest and most widely used around the world.

E

EAFE INDEX - The Europe, Australasia, Far East Index. An index prepared by well-known investment bank in the United States of Morgan Stanley Capital International ® which contains the stock market performance of countries in Europe, Australia, and Far East (Far East). This index describes the performance of approximately 20,000 stocks from more than 20 countries.

Ex-Dividend - A period or interval of time between the date of recording the right to receive dividend (record date) and dividend payment date (payment date), where investors who bought shares in this period did not have the right to receive dividend.

F

FACE VALUE - It is the principal amount indicated on a debt instrument, or on paper money and coins.

FAIR VALUE - Represents the estimated value of all assets and liabilities of a company that will be taken over / acquired, which will then be used to consolidate the financial statements of both companies.

FEDERAL OPEN MARKET COMMITTEE (FOMC) - It is the committee that makes decisions related to operational activities from the Feds to control / supervise the supply of money. This committee meets eight times a year.

Financial Planner - A specialist investment professionals who help individuals describe the financial plan (financial plans) with specific objectives and helps coordinate a variety of other financial activities.

Fiscal POLICY - It is government policy to influence macroeconomic conditions. This policy will affect tax rates, interest rates and government spending in an effort to control the nation's economy.

FIXED ASSET - Represents tangible property owned by a company that used to generate revenue for the company, but not for consumption or to be converted into cash. Plant, machinery, and equipment are examples of fixed assets.

FIXED COST - That is the cost that the numbers will remain the same (unchanged), although the company has experienced a change.

FLOOR TRADER - That members of the exchanges that run the transaction of stock exchange trading floor (the floor) just for his company account.

Float - Is the total number of shares outstanding and available on the market.

FUND MANAGER - Is a person who is responsible for investing in mutual funds, by way of implementing strategy and managing day to day in the trading portfolio. One of the most important factor to consider in mutual funds is to find the right fund manager.

FUNDAMENTAL ANALYSIS - That method of valuation of shares / securities that attempt to measure the intrinsic value of a particular stock. Fundamental analysis studying everything from economic and industry conditions as a whole, until the financial condition and the condition of the company's management.

G

The gearing ratio - is the general term given to leverage ratios that describe the condition of the company's capital. There are various types of gearing ratios such as debt to equity, interest coverage (profits divided by interest payments) to assess the company's ability to pay interest on the loan.

GROSS DOMESTIC PRODUCT (GDP) - is the value of money or monetary value of all goods and services produced by a country in a given period. Includes consumption, spending / government spending, investment and net exports (exports minus imports). Symbolized by Y = C + I + G + (X - M). GDP is a good indicator to assess a country's economic health. And usually measured on an annual basis, although the calculations are also published monthly.

GROSS NATIONAL PRODUCT (GNP) - is an indicator of economic statistics covering GDP plus income earned all those citizens over luarnegerinya investments, net of income generated from investments of foreign nationals in the country. Basically, GNP is the total money generated by the population of a country both at home and abroad.

GROWTH FUND - Is a stock portfolio that berdisifikasi with its main purpose is to increase the price of stock (capital appreciation), which invests in companies that reinvest the proceeds for the purpose of expansion, acquisition, or for research and development company.

GROWTH STOCKS - Is the company's shares are expected to increase its total income above the average level of income. Characteristics of growth stock is P / E ratio is high.

H

INVESTMENT PRODUCTS (YIELD) - The growth rate of investment return during specified periods. Generally measured by: Yield = (Value of Initial Investment + Cash Money Distribution / Dividend) / Final Investment Value.

REAL RESULT (REAL YIELD) - Net proceeds from ownership of a bond, after deducting the inflation rate. Thus if inflation is 4% and a bond yield (yield) 12%, then the net result of these bonds is 8%.

HEDGING - The strategy adopted to avoid or minimize the risk of investment. Perfect hedge is intended to eliminate the possibility of losses in the future.

I

INDEX - The unit of statistical measure changes in the economy or financial markets (financial markets) on a specific date compared to the base year, eg Composite Stock Price Index (CSPI) or Dow Jones ® Industrial Average (DJIA) and S & P 500 ®.

J

JANUARY EFFECT - is a phenomenon that occurs at the end of the year when investors began to worry about tax payments that resulted in stock they may sell some losers so that they can erase that loss of capital gains obtained. This will cause the stock price will decline at year end, and then experienced a price increase again as investors bought back shares before they sell.

JOINT VENTURE - It is the merging of two or more persons or companies in certain sectors and agree to share profits, losses, or share the supervision / control.

JUNK BOND - bond is sold for speculative purposes. Generally the bonds are rated below BB, and have a risk of default (failure to pay) is higher than other bonds. Junk bonds typically offer interest rates 3-4% higher than bonds issued by the government.

K

MARKET CAPITALIZATION (market capitalization) - The fair value of a company measured by market value of shares outstanding.

GAIN OR LOSS IN VALUE OF INVESTMENTS (CAPITAL GAIN OR LOSS) - Gains or losses from sales of property (asset) in a portfolio.

L

LETTER OF INTENT - a non-binding agreement that states the intention (intention) of a party to comply with or expectations of other parties.

LIQUIDITY (liquidity) - Ease of selling or exchanging an asset into cash.

M

MAINTENANCE MARGIN - Is the amount of money should be included / added to cover the back margin requirement (margin amount that must be maintained) in a margin account.

MARGIN - margin is using borrowed money to buy a stock, or more commonly known as buying on margin or margin trading (margin trading). In margin trading, investors bought stocks using borrowed funds from the brokers in which they conduct transactions and interest charged is generally higher than bank interest. Not all clients can transact margin. Margin facilities granted by the broker only to old customers with good potential and margin trading should only be done by an experienced investor, because if your stock price decline significantly, your losses will be greater than the transaction without any margin. While in the company, margin is the difference between the sale price with the cost of production (COGS).

MARK TO MARKET - That record and observe the value or price of a stock / securities, a portfolio, or an account in order to reflect current market value.

MARKET RISK - is the potential loss of day-to-day that will be experienced by investors due to fluctuations in stock prices. Beta of a stock can be used to estimate how big the market risks faced by these shares.

MEDIUM TERM NOTE (MTN) - debenture is usually a term of 5-10 years.

N

VALUE OF INVESTMENT (CAPITAL OR PRINCIPAL) - initial value of investments, excluding revenues (earnings) after the investments were acquired.

NASD (National Association of Securities Dealers Inc.) - A nonprofit organization in the United States consists of all the company's investment bank. With the supervision of the Securities Exchange Commissions (SEC), the U.S. stock market watchdog, the NASD is intended to standardize practices and ethics of trade, particularly those over the counter.

NASDAQ (National Association of Securities Dealers Automated Quotation System) - a computer system that describes the trading activity, such as price and quantity, in the over the counter market.

NET ASSET VALUE (NET ASSET VALUE) - The market value of all property (asset) of a Mutual Fund. Perunit NAV is calculated by dividing the total net asset value by the number of shares outstanding.

BOOK VALUE (BOOK VALUE) - The value of net worth, the difference between total assets with total liabilities (liabilities), a company.

EXCHANGE (EXCHANGE RATE) - A currency exchange rates of a country to country.

O

FOREIGN BONDS (FOREIGN Bonds) - Bonds issued by companies, governments or foreign government agencies.

BOND (BOND) - Promissory notes issued by the Government or the company that will pay a particular coupon and pay off the loan principal at maturity.

OVER-THE-COUNTER MARKET (OTC) - Market securities trading by stock exchange floor directly without going through the telephone and computer network that allows communication among dealers. Traded securities are generally issued by companies that do not qualify for trading on the stock market is bigger, like the New York Stock Exchange.

P

DISTRIBUTION OF CASH MONEY (CASH DISTRIBUTION) - Giving cash to the holders of units of Mutual Funds by the Investment Manager from securities transactions gains in the portfolio of the Fund concerned.

INCREASING THE VALUE OF INVESTMENT (CAPITAL Appreciation) - Increase in fair value (market) of a property (asset), such as stocks, bonds, commodities and property.

DISTRIBUTION OF BENEFITS (capital gains DISTRIBUTION) - Distribution of cash to the holders of units of Mutual Funds from the sale of stocks, bonds or other investment instruments in the portfolio of the Fund.

PORTFOLIO - A collection of some types of securities owned by a person or party or which is managed by an Investment Fund.

PRIVATIZATION (PRIVATIZATION) - A step that removes the management of an enterprise of the government or government agency to private. Usually done by selling the government share ownership, including management control, to private parties, with the expectation that the privatized company will be managed better.

Public Offering Price (POP) - The sales price of the stock or mutual fund to the general public.

Q

Qualitative ANALYSIS - Is the analysis that uses subjective assessments in evaluating a stock / securities based on non-financial information such as company management expertise, industry cycles, strength of research and development activities by the company, corporate relations with unions, and other subjective assessments.

Quantitative ANALYSIS - quantitative analysis is the analysis of stock / securities that uses financial information derived from annual financial reports and income statements to assess whether the company's decision to invest in the company worth. Some of the tools used in this quantitative analysis are financial ratios, cost of capital (capital costs), asset valuation (valuation of assets), and the trend (trend) earnings and sales (whether toward the improvement or decline).

QUICK ASSET - It is current assets minus inventories. Quick assets are assets that are already or easily converted into cash.

QUICK RATIO - the ratio is calculated by dividing current assets (excluding inventory) with short-term liabilities. Quick ratio is an indicator of the company's financial strength. This ratio indicates whether a company has current assets (without selling inventory) to cover its short term obligations. Sometimes also known as acid test ratio.

R

AVERAGE ANNUAL TOTAL RESULTS (AVERAGE ANNUAL TOTAL RETURN) - The average change in value of investments during the period, with the assumption that the cash distributions (dividends) and capital gains (capital gains) in invested back.

MUTUAL FUND (Mutual Fund) - Investment Fund is a vehicle used to collect funds from public investors to be invested in portfolio securities by the Investment Manager.

MUTUAL FUNDS GLOBAL (GLOBAL Mutual Fund) - Mutual Funds that invest in investment instruments worldwide.

MONEY MARKET FUND (MONEY MARKET FUND) - Mutual fund investment portfolio was placed in Certificates of Deposits and marketable securities and other short-term.

SECTORAL FUND (SECTOR mutual funds) - Mutual funds that invest funds in certain sectors, such as consumer goods sector, telekomunikas, and so forth. Theoretically Sectoral Fund tend to be more volatile than the general Fund is invested in many sectors.

CLOSED FUND (CLOSED-END FUND) - A type of mutual fund that issued the specific number of investment units to investors and the Investment Manager, as publisher of Mutual Fund, has no obligation to buy back the investment units to be sold back (redemption) by
investors or owners of units of Mutual Fund.

MUTUAL FUNDS OPEN (OPEN-END FUND Mutual Fund) - A mutual fund that requires the Investment Manager to buy back the units of which will go on sale (redemption) by the owners (investors).

REGISTRATION DATE (RECORD DATE) - A date on which the investor must be recorded officially for shareholders to have to get the dividend. After that date, shares will be traded without the right to the dividend (ex-dividend).

MUTUAL FUND REGIONAL (REGIONAL mutual funds) - Mutual fund that limits its investments in several countries on the basis of geographical location, such as Southeast Asia, Europe, Latin America, and so forth.

REIT (Real Estate Investment Trust) - Unit investment in a fund managed by the Investment Manager in the portfolio of real property (real estate).

S

ORDINARY SHARE (COMMON STOCK) - Proof of ownership in a company, in which common stock owners have the right to receive dividends, vote at the General Meeting of Shareholders (AGM) and, if possible, participate in corporate management.

FOREIGN SHARES (FOREIGN STOCKS) - Shares issued by companies, governments or foreign government agencies.

SHARE PARTIES (Preferred STOCK) - Shares of dividing the dividend by a certain percentage and have the rights to the distribution of dividends and liquidation of assets that precedes the right to be received by holders of common stock.

S & P 500 ® (Standard & Poor's ® Composite Index of 500 Stocks) - Index compiled by market value of 500 shares of common stock that is used to measure the stock market price movements in the stock.

SEC (Securities and Exchange Commission) - A stock market regulatory body in the United States established under the Trade Act of 1934 Securities (Securities Exchange Act of 1934), which aims to improve information disclosure to the public and protect
investment communities against harmful practices in the capital market.

CONVERTIBLE SECURITIES (convertible SECURITY) - Securities issued by a company, such as A Special Shares (preferred stock) and the Convertible Bonds (convertible bond), which can be exchanged for other securities, generally convertible into common stock.

LETTER OF DEBT (DEBT SECURITY) - Securities which represent a loan must be repaid by the borrower in the future or a specific date after the issuance of debt.

T

DATE OF CALL (CALL DATE) - The date of repayment of bonds by the issuer prior to maturity.

DATE MATURITY (Maturity Date) - A date on which the principal amount of debentures are payable (maturity date).

TOTAL RETURN - return (result) of an investment during the period, including the increase in market value of investment goods (capital appreciation), dividends and interest (coupon), and gain on sale of assets (capital gains).

Treasuries - Promissory notes issued by the Central Government of the United States and published by a variety of maturity dates (maturities).

TREASURY BILLS - short-term berharag Letter issued by the Central Government of the United States with a maturity period of not more than one year, with a minimum denomination of $ 10,000, and sold at a discount from the principal.

TREASURY Bonds - Long-term Debt Securities issued by the Central Government the United States for a period of 10 years or more and with a minimum denomination of $ 1,000.

TREASURY NOTES - medium-term securities with maturity period (duration) of more than one year to 10 years, and with a denomination of $ 1,000 to $ 1 million or more.

U

Underperform - It is a recommendation that is often used by the broker (securities firms) for a stock, which means that the stock is expected to be even worse performance.

UNDERSUBSCRIBED - meaning that if total demand for IPO shares is lower than the number of shares to be issued. This is sometimes referred to as underbooking. Opponents of undersubscribe is oversubscribe.

Undervalued - Shares or securities are traded at a price below fair value.

UNDERWRITING - Investment banker acting on behalf of companies or governments that issue securities, seek / collect investment capital from investors. IPO (initial public offering) of a company brought by the underwriters (underwriter).

GAIN unrealized - is the profit arising from holding an asset, but not cashed / realize such benefits. For example, if you have a stock whose price has increased 2 X of the purchase price, but you do not sell these shares (the realization of / monetize these benefits), this is what is said as profit is unrealized.

LOSS unrealized - is the loss resulting from holding an asset, but not cashed / realize the losses. For example, if you have a stock whose price has decreased 50% of the purchase price, but you do not sell these shares (the realization of these losses) and these are said to be a loss that was not realized.

Unsecured LOAN - is a bank loan granted to borrowers based solely on reliability / good name of the borrower and not covered by collateral (collateral).

Unsystematic RISK - Sometimes referred to as specific risk is the risk of having a limited effect. Examples are a sudden strike by employees of a company will affect the company's stock price.

Upside - Is the number of potential improvement that may occur in the market or stock price. Basically estimate how big the upside is a stock price increase in the future.

V

VOLATILITY (volatility) - Fluctuations in the fast and with a relatively high value of the market price of securities. The Stock Market is usually measured by using the beta.

W

Warrant - Is the securities that entitle the holder to buy shares / securities from issuing warrants for a price. Warrants are usually long-term instruments, due to the maturity date is generally more than a year. Warrants are similar to options
call / buy. However, the validity of warrants are usually annual, while the period of the call option purchase usually monthly. Furthermore, the warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company.

Weighted average cost of CAPITAL (WACC) - is the calculation of the cost of capital (cost of capital) of the company by giving weights of each category of capital (shareholders equity, bank loans, bonds, etc.). WACC is the average expected rate of return on investment of a company.

WRITE-OFF - It imposes a number of assets for expenses or losses, with the aim to reduce the value of these assets and reduce revenue.

X

XD (ex-dividend) - It is the symbol used to indicate that the shares / securities are traded on ex-dividend. This symbol is commonly used in newspapers.

Y

Yankee Bond - Is foreign bonds denominated in U.S. dollars and issued in the United States by foreign banks and foreign companies.

YEAR TO DATE (YTD) - It is the early period (1 January) until today's date.

YIELD - Is the amount of interest paid on a bond divided by the price of bonds. In other words, yield measures the revenue generated by a bond. Yield is also the rate of return (rate of return) of an investment, usually quoted is the percentage per year.

Yield curve - is a line graph that shows interest rates at some point for all securities with the same risk level but different maturities. Securities with maturities longer usually have a higher yield. If short-term securities offer higher yields, the curve is called inverted.

Yield to maturity is the level-yield (rate of return) of a bond until the bond matures.

Z

ZERO COUPON BOND - Is debt / government or corporate bonds traded by discount from face value. The bonds are traded by discount because the bonds do not provide interest to the holder. Gain / profit will be obtained by bond holders at the time the bonds are redeemed by the issuer with the full face value. Such bonds are usually issued by discount, or maybe it could be of coupons taken from the bond and then re-issued as bonds with no interest (zero coupon bond).

ZERO-SUM GAME - It was a situation where the benefits obtained by one party is a loss the same amount on the other. So the difference between the profit on the one hand with a loss on the other side is 0 (not including fees).