Amanda Stanhaus

Tag: price

Bid Price

The money offered to buy a security.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Consumer Price Index

CPI. A # that tracks changes in prices (inflation) by tracking a basket of goods ranging from groceries to cars.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

 

Derivative

A contract (really a bet) on an underlying security. Its price is derived from the underlying security.  Futures and options are derivatives.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Efficient Market Theory

Value is perfectly reflected in the stock price. Therefore, take a random walk and enjoy the ride. This what Warren Buffett has disproven.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Face value

The price on the shoe box. The dollar amount on a security’s certificate.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Fundamental Analysis

Evaluate the value of a security. Used by value investors (i.e. Warren) to decide if there is a difference between the price and value of a stock. If price<value, buy and I could make lots of money.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Future

The guy at the bar gives me his card, I may or may not want to see him again. I have the option of calling him. A future is this except with a price and an expiry date.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Dollar Cost Averaging

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Usually, I like to stand out, not fit in. But there is an exception.

Dollar cost averaging is the one scenario where I like to be average.

(click on the bold-faced vocab words:))

Remember how I have 10% of my income automatically invested. That’s dollar cost averaging.

Each paycheck is the same amount (but I would like it to be more), therefore the amount invested is consistent.

The # of mutual fund shares I buy is determined by the price of the shares and the investment amount.

Since the investment amount is consistent, I automatically buy more shares when the price is low and less shares when the price is high.

It’s really what I’m supposed to do anyway. With this system there is no room for human error. I don’t have an option to get too excited and buy more of the rising stock. Whew, dodged that bullet.

I approve of being average, only when dollar cost averaging.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Offering Price

I’ll pay this much. What do you say?

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Portfolio Rebalancing

When there is a price increase (or decrease) I must reallocate the number of shares to the keep same asset allocation.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)