Malaysia Stock Investment 101: Glossary 📗🔍

Glossary of Investment Terms

A brief glossary explaining common investment terms like P/E ratio, dividend yield, and stop-loss orders can be a helpful reference for beginners. This will help you sound like a pro at your next family gathering! 😜

Core Investment Terms

• Annual Report: A yearly financial statement issued by a company to its shareholders.
• Asset Allocation: The distribution of investment funds across various asset classes.
• Bear Market: A prolonged period of declining stock prices.
• Blue-chip Stock: A stock of a large, well-established company with a strong reputation for stability and profitability.
• Bond: A debt security issued by a corporation or government, promising to repay the principal amount with interest.
• Bull Market: A prolonged period of rising stock prices.
• Capital Appreciation: An increase in the value of an investment over time.
• Dividend: A portion of a company's profits paid to shareholders.
• Diversification: Spreading investments across various assets to reduce risk.
• Earnings Per Share (EPS): A company's net income divided by its outstanding shares.
• Market Capitalization: The total value of a company's outstanding shares.
• Portfolio: A collection of investments owned by an individual or organization.
• Price-to-Earnings (P/E) Ratio: The ratio of a company's share price to its earnings per share.
• Stock (or Share): A unit of ownership in a company.
• Volatility: The degree of price fluctuation in a security or market.

Investment Orders and Strategies

• Limit Order: An order to buy or sell a stock at a specific price or better.
• Market Order: An order to buy or sell a stock at the current market price.
• Stop-Loss Order: An order to sell a stock if its price falls below a specified level.
• Dollar-Cost Averaging: Investing a fixed amount in a particular investment on a regular schedule, regardless of the share price.
• Rebalancing: Adjusting a portfolio to maintain the desired asset allocation.
• Short Selling: Borrowing shares to sell, hoping to buy them back at a lower price and profit from the difference.

Investment Products

• ETF (Exchange-Traded Fund): A fund that tracks an index, but trades like a stock.
• Mutual Fund: A pool of money managed by professionals, investing in various securities.
• Index Fund: A mutual fund that tracks a specific market index.
• Option: A contract giving the holder the right, but not the obligation, to buy or sell an asset at a specified price.
• Futures: Contracts to buy or sell a specific asset at a future date.
• Real Estate Investment Trust (REIT): A company that owns or finances income-generating real estate.

Financial Analysis and Risk

• Dividend Yield: The annual dividend per share divided by the share price.
• Beta: A measure of a stock's volatility relative to the overall market.
• Fundamental Analysis: Evaluating a company's intrinsic value based on financial performance.
• Technical Analysis: Predicting future price movements based on past price and trading volume data.
• Risk Tolerance: An investor's ability to accept market fluctuations.
• Investment Horizon: The length of time an investor plans to hold an investment.
• Liquidity: The ability to convert an asset into cash quickly.

Additional Terms

• IPO (Initial Public Offering): A company's first sale of stock to the public.
• Secondary Market: Where stocks are bought and sold after the IPO.
• Bullish: Optimistic about the market.
• Bearish: Pessimistic about the market.
• Speculation: Investing in stocks based on anticipated price changes rather than long-term value.
• Margin Trading: Borrowing money from a broker to invest in stocks.

Just give me a shout if I’ve skipped over anything, alright? 📢 Don’t hesitate to chip in with your thoughts below. 💬

If you need any more help or have other questions, feel free to ask! 😊

Disclaimer: All information in this blog is intended for general knowledge and informational purposes only, and does not constitute financial advice. It's essential to conduct thorough research or consult with a financial advisor before making investment decisions.