An IPO occurs when a private company offers its shares to the public for the first time, allowing investors to buy ownership stakes in the company.
The risk-return trade-off states that higher potential returns are associated with higher levels of risk. Investors must find a balance that aligns with their risk tolerance and financial goals.
Diversification involves spreading investments across various asset classes to reduce overall risk. It helps to minimize the impact of poor performance in any one investment.
Blue-chip stocks refer to shares of large, established companies with a history of stability, strong financial performance, and a reliable reputation.
An ETF is a type of investment fund that holds a diverse portfolio of assets and trades on stock exchanges like a single stock, providing investors with exposure to various markets and asset classes.
An investment portfolio is a collection of various assets, such as stocks, bonds, and real estate, designed to spread risk and optimize returns through diversification.
Political stability can affect the supply and demand dynamics of commodities like gold and oil, leading to changes in their prices.
A financial advisor helps individuals make informed investment decisions based on their financial goals, risk tolerance, and market knowledge.
A 401(k) is a tax-advantaged retirement account that allows individuals to save and invest for retirement while deferring taxes on contributions and investment gains until withdrawal.
Long-term investors aim to achieve growth over an extended period, focusing on overcoming short-term market volatility for better overall returns.
Fundamental analysis involves assessing a company's financial statements, management, industry, and economic conditions to determine its intrinsic value and make informed investment decisions.
Venture capital involves investing in early-stage companies with high growth potential. While the returns can be substantial, the risk of loss is also high due to the uncertain nature of startups.
Compounding involves generating earnings not only on the initial investment but also on the reinvested earnings over time, leading to exponential growth.
A stop-loss order is placed to automatically sell a stock when its price drops to a predetermined level, limiting potential losses.
Precious metals like gold are often considered a hedge against inflation because their value tends to rise during periods of economic uncertainty and high inflation.
Corporate bonds are debt securities issued by companies. They are considered less risky compared to stocks because they represent a fixed-income stream and have higher priority in case of bankruptcy.
