
Investing Glossary
Stock market jargon got you all confused? Don’t worry, we’ve got you!
This glossary explains common investing terms in plain language so you can follow along in seminars, invest with confidence, and make smarter moves.
Fundamental Terms
-
A way to evaluate a stock’s real value by looking at a company’s business, financial health, and the economy.
It helps you tell if a stock is too cheap, too expensive, or just right based on how the business is doing.
-
This means ownership in a company. When you buy equity (also called shares or stocks), you're buying a small piece of that company.
It’s like owning a slice of Jollibee or SM!
-
This is the latest market price of a stock, or the amount it was last bought or sold for.
Just like checking the price tag before you buy something!
-
Market capitalization (or “market cap”) is the total value of a company’s shares. It helps you see how big or small a company is in the stock market.
Example: If a company has 1 million shares and each share is worth ₱10, its market cap is ₱10 million.
-
This is how much money a company makes from selling its products or services. It’s often called the “top line” because it’s the first thing you see in an income statement.
More revenue usually means the business is growing!
-
This is a company’s profit after all expenses have been paid—like rent, salaries, and taxes. Also known as the “bottom line.”
It tells you how much money a business really earned.
-
EPS tells you how much profit a company makes for each share. Higher EPS can mean the company is doing well and may be a good investment.
It’s a helpful clue for spotting strong companies.
-
A portion of a company’s profit shared with its investors. If you own stock in a company that gives dividends, you get a “thank you” bonus either in cash or more shares.
Think of it like a reward for being a loyal part-owner of the business.
-
This shows how much a company shares its profit with you as an investor. It’s the yearly dividend (your earnings) divided by the current stock price.
Think of it like getting “interest” for owning a stock.
-
This is the estimated worth of a company or stock. Analysts calculate this using different methods to see if a stock is overpriced or a good deal.
It’s like finding out the “true price” before you buy.
-
P/E tells you how much you're paying for every peso a company earns. A lower P/E might mean a better deal. A higher one could mean the stock is expensive, or expected to grow fast.
It helps you compare if a stock is “worth it” or not.
-
ROE tells you how well a company uses investors’ money to make a profit.
A higher ROE means the company is putting your money to good use.
-
This shows how much a company relies on borrowed money compared to its own funds.
More debt than equity? That could mean higher risk if times get tough.
-
Liquidity shows how easily you can buy or sell an investment without changing its price too much.
Think of it like selling a phone - if many people want it, it’s easy to turn into cash fast!
-
A market index is like a scoreboard. It tracks a group of stocks to show how a certain part of the market is doing.
Example: The Philippine Stock Exchange Index (PSEi) shows the performance of the top 30 companies in the country.
Technical Terms
-
A way to study stock price movements by looking at charts, trading volume, and patterns.
It helps investors spot trends and possible price changes by analyzing how people are buying and selling in the market.
-
This is the lowest price a seller is willing to accept for a stock.
Think of it like a seller saying, “I’ll let go of this stock for ₱100. Deal?”
-
This is the highest price a buyer is willing to pay for a stock.
Think of it like a buyer saying, “I’ll take that stock if you sell it to me for ₱95.”
-
Volume tells you how many shares were traded during a set time (like a day or a week).
Big volume = a busy day at the stock market!
-
A volume spike is a sudden jump in how many shares are being traded.
It usually means big news, strong interest, or a possible trend change is happening.
-
A candlestick chart shows how a stock’s price moved during a specific time.
Each candle tells you:
Where the price started and ended (body),
How high or low it went (wicks/shadows).
These charts help spot trends and possible reversals—like “doji” or “hammer” patterns.
-
Support is a price level where buyers tend to step in, keeping the price from falling further.
Think of it like a floor that catches the price when it drops.
-
Resistance is the opposite of support. It is a price level where selling usually increases and stops the price from going higher.
Like a ceiling that blocks the stock from rising more.
-
This tool smooths out price movements by showing the average price over time (like the past 50 or 200 days).
It’s great for spotting trends and potential buy/sell signals, especially when short- and long-term lines cross.
-
This shows the highest and lowest price a stock has reached in the last year (52 weeks).
If the stock is near its highest price, it may be gaining strength. If it’s near the lowest, it could mean it’s undervalued (or in trouble).
-
RSI measures if a stock has been rising or falling too much. It helps spot if it’s overbought or oversold.
A high RSI (over 70) might mean the stock is too “hot.” Low (under 30)? It might be on sale.
-
A breakout happens when a stock price moves above resistance or below support, often leading to bigger moves.
Like a ball breaking through a ceiling—it might keep soaring!