Terms Explained

What is the Income Statement?

The income statement similar to the balance sheet statement helps investors with analyzing the operating strength of a company which helps to further solidify the financial health of a company.

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Investors Looking at the Balance Sheet to Help Determine Financial Health

What is a Balance Sheet?

The balance sheet is a statement giving insight into the financial health of a company by allowing investors to calculate various ratios based on assets, liabilities and shareholder’s equity.

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A Bear Market brings prices down but also creates investing opportunities.

What is a Bear Market?

A bear market is the exact opposite of a bull market(increase in equity market values) where market prices decline by 20% or more for a prolonged period of time.

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Companies with superior profits can reward shareholders with cash dividend payments.

What is a Dividend for Common Stock?

A dividend is a portion of a company’s earnings paid directly in the form of cash to eligible shareholders. These payments can be monthly, quarterly, or annually and all decisions in regards to dividends are controlled by the board of directors for a publicly traded company.

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Volatility involves swings in price movements up and down.

What is Volatility?

Volatility is a technical measure of the change of returns for a particular asset or market index. It is a means where big swings in either direction are statistically captured when it comes to the asset or index in question.

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Inflation is a gradual rise in prices decreasing the value of money.

What is Inflation?

Inflation in economics is a relatively simple concept and represents the upward movement in the overall price of goods and services within the economy.

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Investors Should Ask Themselves if their Portfolio is Diversified.

Why Portfolio Diversification Is Important

Diversification is a word that is talked about frequently in investment circles and among those just getting started. This a word that shouldn’t scare anyone but can take on many different meanings and levels when constructing your portfolio.

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