Broker - An intermediary which provides investors
the ability to purchase stock in publicly traded companies.
Capital Gains - Realized profits which come from
selling shares of a company at a higher price than the
original cost of purchase.
Cost Basis - The actual cost to the investor of
purchasing a security, accounting for commissions, fees
and the price paid.
DRIP - Dividend Reinvestment Plan, which is a plan
sponsored and offered by a public corporation where dividends
that might usually be paid to the investor in the form of
cash are instead reinvested as a means of purchasing
additional shares of a particular company.
Dollar Cost Averaging - Investing a fixed dollar amount
in regular intervals, such as weekly, monthly, or quarterly,
where an investor attempts to purchase stock at an average
price and remove emotion and the risks of market timing.
Diversification - The practice of spreading one's
investments over several industries and company sizes in order
to minimize risk while maintaining favorable reward potential.
Long-Term Investing - The practice of buying and holding
shares of financially strong, growing companies over five, even
ten years, or more in order to minimize tax ramifications and
remove emotion from the investment process.
Market Timing - Practiced by many but mastered by few,
an attempt to buy low and sell high.
NYSE - The New York Stock Exchange, where the most
respected and financially stable public companies in the
NASDAQ - The National Association of Securities Dealers
Automated Quotations, where younger more aggressive companies
trade in the public market.
Shareholder - Owner of shares in a publicly traded company,
who is registered and on file with that company.
Transfer Agent - An institution that maintains and manages
the records of a company's stock and its shareholders.