ESL Podcast 276 - The Stock Market
stock market - the stock exchange; the buying and selling of stocks or shares (small parts in the ownership of a public company)
Dora decided to enter the stock market by buying stock in three large computer companies.
NASDAQ - National Association of Securities Dealers Automated Quotations system; a popular stock market in the United States
NASDAQ helps people buy and sell shares in more than 3,000 companies.
Dow - the Dow Jones Industrial Average; an average of the value of 30 popular stocks that helps people understand how strong or weak the market is
The Dow has been up and down all day, but I think it will end up for the day.
portfolio - the combination of different stocks, bonds, and other investments that a person has
Sharon decided that her portfolio was too concentrated in communication technology, so she is going to buy some shares in agricultural and transportation companies.
stock option - an opportunity given to an employee to purchase stock in the company at a given price in the future, so that if the actual market price at that time is higher than that price, the employee will make money
If the company can't offer you any more money, you should ask if it will give you stock options as part of your compensation for working there.
bond market - the buying and selling of bonds, which are pieces of paper that promise that the government or another organization will pay back the money it borrowed with interest
You can't make as much money in the bond market, but it is less risky than the stock market right now.
derivative - a written agreement between two people or businesses, where the value of the agreement is based on other stocks, bonds, currencies, or other assets (things that are worth money)
Investing in derivatives is more risky than investing in stocks and bonds, so usually only professionals invest in them.
shares - the portion of ownership in a public company that can be bought and sold in the stock market
How many shares do you own in General Electric?
nosedive - a dramatic decrease; a large, sudden fall; a quick and significant drop-off in something
The company's sales took a nosedive last month, dropping from $100 million to only $80 million.
stockbroker - a person whose job is to buy and sell stocks (or shares) for other people
Their stockbroker recommended buying more international stocks, especially in Asian companies.
diversified - involving many different types of things, especially different types of stocks or shares in different industries
The Watkins have highly diversified investments, with shares in all industries all over the world.
security - a stock, bond, or derivative
What kinds of securities do you invest in?
to invest - to give money to a project or company to help it grow, because one expects to make money as a result
Before you invest in a company, you need to learn as much as you can about its past performance and its plans for the future.
return - yield; interest rate; the amount of money (usually stated as a percentage) earned by making an investment
The company expected a 26% return last year, but the high price of oil made their actual return only 11%.
bear/bull market - a period of time when people expect that share prices will decrease (bear market) or increase (bull market)
During a bear market, people want to sell shares because they think that prices will fall, but during a bull market they want to buy shares because they think prices will rise.
to rebound - to recover; to improve and return to what something was before
The heavy rains ruined the wheat fields last year, but the farmers have rebounded this year, growing more wheat than ever before.
to panic - to do something without first thinking about it carefully, usually because one is scared or under stress
When Cathy's car slipped on the ice, she panicked and tried to stop quickly, which made the problem worse.