Overview of key stock market terms
Do you want to invest in the financial markets, but puzzled by many of the stock market terms? No problem. We explain the most important stock exchange terms to you in our glossary of investment terms – easy to understand for newbies and beginners in the financial markets.
These stock exchange terms are essential
If you are interested in trading in equities and other securities, you need to understand the key stock exchange terms used by professionals. Our stock market glossary helps you with this. It contains important stock market terms that investors should know in order to make investment decisions as easily as possible. After all, anyone who wants to invest on the stock market safely cannot avoid these important stock market terms. The glossary is aimed at both beginners and those with an intermediate understanding, offering simple explanations for a wide range of key terms relating to the stock market and securities trading.
Key Stock exchange terms
What does asset management involve?
Asset management is the professional administration of financial investments in order to increase customers' wealth, wherever possible. It includes, for example, the selection and monitoring of investments.
What is a custody account?
A custody account holds and manages equities and other securities, and is where purchases and sales are booked. A custody account is not used for payment transactions.
What is market timing?
Market timing seeks to find the best time to buy and sell investments. This is very difficult in practice. A long-term investment horizon generally promises more returns.
What is a portfolio?
A portfolio is the collection of all investments owned by a person or company. It may include equities, bonds and other investments.
What is a return?
The return shows how much profit an investment brings in relation to the capital invested. It is usually expressed in percent.
What are equities?
Equities represent units of a company. In principle, shareholders can vote at the annual general meeting and are entitled to dividends (receive a share of the profit).
What is a dividend?
A dividend is the part of the profit that a company distributes to its shareholders. It is usually paid annually or quarterly.
What is the P/E ratio?
The price-earnings ratio (P/E) expresses the profit of a company relative to its share price. It helps to value equities.
What is the TER/management fee?
The TER (total expense ratio) shows the total annual costs of a fund. It is expressed as a percentage of the fund assets and includes all ongoing fees.
What is the difference between reinvesting and distributing funds?
Reinvesting funds reinvest dividends in their own funds. The opposite is true for distributing funds, which distribute dividends to the investors.
