Investment Dictionary: the essential stock market terms

For people who have been struggling with bankruptcy over a long period of time they learn to scrimp and save money after they have exhausted their credit lines.  It usually takes the person that has filed bankruptcy about 6-8 months to really become acclimated to not having to deal with several creditors, this is assuming their bankruptcy was due to having to many credit lines and not managing their credit wisely. After this gestation period  several post bankruptcy filers look to increase the amount they save by starting or increasing their 401K contributions. In addition, if they find they have an abundance of cash available they may look towards investing in stock and investing in their future. This scenario is no different from people filing bankruptcy in Michigan.  Unfortunately, when post bankruptcy files begin to invest they also make some basic mistakes. The best thing to do  prior to investing in the stock market is to do  your research before you spend any money.

For an average individual, the stock market can be a pretty complicated place. A day in the stock market typically consists of people constantly moving around, many with mobile phones attached on their ears, talking to someone else on the other line. But, as the common saying goes, that’s business as usual.

It is inevitable that a person may get to encounter terms that are unfamiliar to him in one way or another. Therefore, the first among investing advice is that it is important to know these terms found in the investment dictionary.

Stock Split

As the company expands and its stock price rises, consequently the stock will “split” or divide. A lot of stock splits resulted from stock prices have become so high it inhibits prospect investors.

Reverse Split

Still in the investment dictionary, this is somehow different from the stock split. One example of this is that in a reverse 1 for 2 split, two previous shares would be exchanged for one new share and the price would increase consequently. Most often, reverse split occurs as company’s stock has decreased in worth such, that even by its value, it is already uninviting to prospect investors. Furthermore, the dividend and the number of shares will change correspondingly.

Adjustments

As discussed earlier, when there is a stock split, the share’s price and dividend is also adjusted. Additionally, the number of outstanding shares increases. On stock price account records, the values listed are adjusted for splits. This can be a complicated system since the historical price displayed for a given stock will be adjusted for splits that occurred in the future.

Ex-dividend

In an investment dictionary, ex-dividend refers to the time gap between the declaration of a dividend payment and the date of the payment. An investor that purchases shares after the “ex” date is not permitted to obtain a dividend. Generally, a share that has an ex-dividend date will drop in value by the amount of the dividend on the ex date. Furthermore, a stock or security that has become ex-dividend will be marked by an “x” in publications and at times with “adjusted”, since the value has been modified accordingly with the amount of the dividend.

As mentioned during the first part of this article, the stock market can have so many technical terms that only those who are in the industry can comprehend. On the other hand, these basic stock terms in the investment dictionary can be of great help to anyone who may get to encounter situations involving investments and the whole business in general.