Glossary

Ask Price:
The price that sellers want to sell for is called the “Ask” price.
Bear Market:
A prolonged period of pessimism and falling stock prices that seems to feed on itself and generates even more pessimism and even lower stock prices.
Bid Price:
The price that buyers are willing to pay is called the “Bid” price.
Bull Market:
A prolonged period of optimism and rising stock prices that seems to feed on itself and generates even more optimism and even higher stock prices.
Business Cycle:
The typical business cycle consists of periods of economic expansion, contraction (recession) and recovery to a new peak.
IPO:
IPO stands for Initial Public Offering. This represents the FIRST opportunity for the public to purchase shares in a particular company.
Recession:
A recession occurs if a business cycle contraction is severe enough and the GDP declines for 2 consecutive quarters.
Stock Exchange:
Stock exchanges are simply organizations that allow people the ability to buy and sell stocks.

Further Reading

Exercise

If you haven’t already place at least one stock trade.

  • Make at least one trade of an index ETF and a Gold ETF in your practice account.

Read some financial web sites and turn on some financial TV shows and see where the “experts” think we are in the economic cycle. Are we in a recession or are we in an expansion phase?

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