Stock Market Dictionary: Your Guide to the Jargon

thebalancemoney.com:

Bear market, correction, bonds—you don’t need to be working on Wall Street to know how these impact your investments and what’s happening to your money. If you’ve been looking at your brokerage account or 401(k) balance, it’s fluctuated a fair bit this year thanks to volatility in the stock market. 

There are many factors that impact the stock market, but they don’t need to sound complicated or full of jargon. Here’s a breakdown of some important terms that can help you understand what is affecting your portfolio and how.

Stocks are units of ownership in a publicly traded company. When you buy stock, also known as shares, you essentially become part owner of that company. Shares trade on stock exchanges such as the New York Stock Exchange (NYSE) or Nasdaq, and you can buy and sell them in a  brokerage account. 

When you invest in stocks, there are two ways you can make money. Stock prices fluctuate continuously, and one way to make a profit is by selling your shares if the price increases.  The other way is by collecting dividends, which are a portion of earnings that some companies distribute  to shareholders. 

The Nasdaq is the second largest stock and securities exchange in the world (behind the New York Stock Exchange).It became the first fully electronic stock market in 1971, which means it didn’t have a physical trading floor like the ones you see pictures of  in the media.

Many major technology companies trade on Nasdaq. When you hear on the news that the Nasdaq is down, it typically refers to the Nasdaq Composite Index (there other Nasdaq indexes), which is made up of all 3,739 stocks that trade on the Nasdaq exchange. More than half of those companies are in the technology sector, including Apple, Alphabet,