Market Terminology

To most people, even those with considerable investments, the financial world can still be a swirling mess of obscure terms and mysterious concepts. Learning the language of the market and economy in general can be daunting. We many tentatively look up what one word or phrase means only to see its definition depend upon three or four more vague, complex bits of jargon.

It is easy and understandable to become frustrated with this tangled web and simply decide that we do not have the time to get a grip on what is really going on. However, while we cannot all become market specialists, getting to know the basic vocabulary and relevant operations of the free market can help keep you from being taken advantage of and ultimately serve you in the end. The more you know, the stronger and more cautious your decisions will be.

With this humble but important goal in mind, here are a few simple terms to start you on your way:

• Share: a share is a measure of an investor’s ownership of a company, or a part in its “stock.” Shares are created when companies go public, dividing up possession by selling stock in themselves in what is known as an Initial Public Offering, or IPO. Shares are also known as equities, and can come in a wide range of forms. Before investing, always find out the details of what the possession of your shares entails.
• Security: one of the more important yet especially difficult to pin down financial terms, a security is basically anything that represents financial value. This can range from a single equity share to a banknote (also known as paper money) to a bond, or a loan taken out with interest involved and a particular date of repayment.
• Market Cap: This is the term for the price you would have to pay for every share of the company. Short for Market Capitalization, it is figured by multiplying the number of shares by their individual price.

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The financial world can seem daunting to those unable to commit themselves to trying to figure it out. If you or someone you love has been affected by a major financial crisis or loss, contact the South Florida bankruptcy lawyers at the law office of Eric N. Klein & Associates, P.A. today by calling 561-353-2800 for help understanding the forces behind your situation and what your best options may be at this point.