The Glossary

A gift, contribution or donation given in kind as a show of reciprocity, support or thanks for generosity shown. Some iwi and hapū use whakaaro or kohi, due to thoughts around tapu and the longer form word takoha.

Whakataukī: 

Ahakoa he iti he pounamu — Although it is small, it is greenstone

A listed investment company (LIC) buys a mix of different investments, such as stocks, bonds and property, and is publicly listed on the ASX where everyday investors can buy or sell shares in them. Like exchange traded funds, LICs enable investors to diversify their portfolio and potentially lower risk. LICs are managed by professional fund managers who charge a fee for managing the investments. They differ from listed investment trusts (LITs) because they’re structured like companies and issue shares, while an LIT is structured as a trust and issues units. Because LICs are listed on the share markets, they can be simpler to buy than mutual funds. There are more than 100 LICs and LITs on the ASX. Learn more about LICs and LITs.

The London Stock Exchange, or LSE, is the largest stock exchange in the UK and Europe. One of the world’s oldest stock exchanges, it was founded in London in 1895. In 1973 it merged with several provincial exchanges, including the Edinburgh exchange, to form the LSE. More than 1,300 companies from 60 different countries list on the LSE with a combined market cap of around US$4.861 trillion. These include Toyota (Japan), General Electric (US), and Rio Tinto (Australia). The FTSE 100 Share Index, or ‘Footsie’, includes 100 top blue chip stocks listed on the LSE, including Tesco, Vodafone, Barclays, BP and Rolls Royce.

A ledger, or digital ledger, is a digital record that keeps track of all transactions or data. It’s a secure, unalterable list where everyone who looks through it can see what happened and when. When people talk about blockchain as being a digital ledger, they mean it’s a detailed digital notebook that stores all the important information.

Liabilities are what a company owes to others. These can include loans, unpaid bills, mortgages, debts or other financial responsibilities. They fall under:

• Current or short-term or near-term liabilities: What’s owed as part of usual business operations within a year - such as monthly bills, short-term debt, expenses, wages, and dividends due to be paid to investors
• Non-current or long-term liabilities: What’s owed that are listed on a company’s balance sheet that aren’t due for more than a year. These can be sizeable and include things like deferred taxes, payroll, and retirement funds

Looking at a company’s liabilities is important for understanding whether they are in good financial health now and into the future.

Limit orders give investors some control over the price they buy and sell shares compared to market orders, and can be used to buy or sell shares at a lower price than they're currently trading at. To create a limit order, an investor enters the exact number of shares at the price they want to pay (buy), or receive (sell). The order will be completed for buyers, if the market price matches or goes lower; and for sellers, if the market price matches, or goes higher. Understand the differences between market and limit orders.

Liquidity means how simply and quickly an asset or security can be converted to cash without negatively affecting its market price. High liquidity means an asset can be quickly turned into cash without impacting its value, while low liquidity means an asset can’t easily be converted to cash without affecting its value. Money is the most liquid of assets, while tangible items - like houses - are less liquid. Investors value liquidity because it provides flexibility and reduces the risk of significant price fluctuations. There are two main types of liquidity:

• Market liquidity: Where assets can be bought and sold at stable, transparent prices
• Accounting liquidity: Assesses whether there’s enough available cash to pay off debts

Understanding an asset’s liquidity - such as company stock - is important for making informed investment decisions.

The listing date, or effective date, is the day a stock exchange lists shares and when trading in a public market commences after an IPO. This happens once shares have been allocated - usually once they’ve been paid for - and includes the share market having approved a company to list their shares there. To do this, the exchange has made sure a company can follow all its rules and the company has paid the listing fees. On this date, the total number of shares is confirmed along with the listing price, and any investor, including retail investors, can buy the company's stock on the share market.

Listing is when a company’s IPO shares become available to buy and sell via a share market or stock exchange. A company goes from private ownership to public ownership by listing on a share market through an Initial Public Offering (IPO) a direct listing or a SPAC.

A lock-up period is when founders and some early investors and company employees are restricted from selling their shares after an IPO lasting usually between 90-180 days. The goal of a lock-up period is to avoid flooding the share markets with too many shares in a company and causing the share price to drop due to oversupply. Once the lock-up period ends and all restrictions are lifted, investors can sell or buy as many shares as they choose and that are available.

Losses in financial markets, bonds, shares, or real estate investments refer to negative financial outcomes. These occur when the value of an asset decreases, resulting in lower capital gains or investment returns. For example, falling stock prices or property values leads to losses for investors and property owners. These financial setbacks can impact an individual’s net worth and overall financial health.

A company’s market cap, or market capitalisation, is their total dollar market value, or their worth as determined by the share market and investment professionals. A company’s share price and how many outstanding shares dictates their current value: Share price x number of shares = market cap (value of the company).

A market order or buy order is the most straightforward way to buy and sell shares. It’s an instruction by an investor to a broker to buy or sell shares, bonds, or other assets at the best price currently available on the stock exchange. A market order is the default choice for buying and selling for most investors most of the time. When a market order is placed, the trade happens immediately at the current market price (or when the share market is next open). The price when an investors submits a buy order may differ slightly from the final price of the order due to after hours market movements, which occur when a market is officially closed.

Mergers and acquisitions (M&A) refer to two companies combining. In an acquisition, one company buys another outright, while a merger creates a new combined legal entity under one corporate name. M&A deals can be valued by comparing similar companies in an industry. M&A activities can also include acquisition of major assets, tender offers for stock, or even hostile takeovers. Not all M&A transactions succeed.

The minimum subscription is the lowest amount of IPO shares investors need to buy for an IPO to complete successfully, which is typically 90%. If the 90% threshold isn’t met, the company returns the money from the orders placed. This situation is considered an undersubscribed IPO. While it’s not common, it could be due to poor promotion, or share market or economic conditions at the time.

A money market fund is a type of mutual fund that spreads money across lower-risk investments, such as cash, or cash equivalent securities, certificates of deposit, or US Treasury securities. These funds are managed by fund managers and backed by investment fund companies with the goal of keeping the value of the money stable. Learn more about money market funds.

A mutual fund is an investment where money is pooled together to buy a mix of assets, including equities, stocks, bonds and other securities. A mutual fund investment portfolio is managed by a fund manager. By investing in mutual funds, people diversify their investments, which can help reduce risk. Investors earn returns based on the fund’s performance minus fees and expenses. Unlike exchange traded funds and LICs that are traded on a stock exchange, mutual funds must be bought directly from the financial company that manages them.

Knowledge, wisdom, understanding, comprehension, insight, knowledgeable person, expert, expertise.

Whakataukī: 

Whaowhia te kete mātauranga — Fill the basket of knowledge

The New York Stock Exchange (NYSE) dates back to 1792 and is the world’s largest share market. It lists many blue chip companies and global brands, including American Express, Coca-Cola, Disney, IBM, and Johnson & Johnson. The total value of the companies listed on it is higher than the Nasdaq, Tokyo and London share markets combined. Like the Nasdaq, the NYSE is owned by a public company, Intercontinental Exchange (ICE). Learn about the NYSE.

The Nasdaq is a US share market that formed in 1971 and has been entirely electronic from day one. Most tech companies are listed on the Nasdaq. This includes Apple, Facebook, Microsoft, Amazon, Google, Tesla and NVIDIA. Like the NYSE, the Nasdaq is a public company, Nasdaq OMX Group (NDAQ). Learn more about the Nasdaq.

Net Asset Value, or NAV, is the value of the shares in a fund, such as an ETF or a mutual fund. NAV is calculated at the end of each trading day, as:

NAV = total asset value - total liability / total # shares outstanding

NAV as a financial metric helps investors understand the fund’s value and performance.

When a company spends more money than it earns, it has a net loss. When a company’s total expenses are higher than a company’s income or revenue, they make a loss. In business, a net loss means a company isn’t making enough profit to cover their expenses. When a company in growth reinvests their profit in the business, they may report a net loss. If net losses continue and a company is unable to make a profit, this may indicate that the business is in trouble.

Over-the-counter markets, or OTC, refers to the markets that list more than 12,000 securities, which can include stocks, ETFs (exchange traded funds), ADRs (American Depository Receipts), bonds, commodities, cryptocurrency, penny stocks, or derivatives. OTC markets are decentralised, as opposed to centralised exchanges like the NYSE and Nasdaq, but most still meet SEC regulations. Companies may choose to list on an OTC market if they don’t meet the requirements of other exchanges - such as trading volumes, shareholder numbers, or reporting requirements - or when they can’t meet the listing fees - which in June 2024 sat around US$250,000 to list on the NYSE, and up to US$173,500 on the Nasdaq. The OTC markets are electronic only, and trades occur directly between two parties, typically with no intermediaries (such as brokerages or brokers), but many still use stock tickers like traditional exchanges. OTC Markets Group (OTCM) operates a public market for some over-the-counter securities - some that go on to list on the NYSE and Nasdaq. Three main OTC exchanges include:

• Best Market (OTCQX): Credible companies that meet high financial and reporting standards
• Venture Market (OTCQB): Younger companies in growth mode that meet lenient financial guidelines‍
• Pink Sheets: Considered the riskiest of all, this OTC market is known for trading volatile penny stocks that were made famous by The Wolf of Wall Street. This market is prone to fraud, shell companies and a lack of financial or company transparency.

An offer document, or prospectus, must be filed with the relevant stock exchange and be made publicly available, along with the S-1 for listing in the US, before a company can list shares for sale on a share market. Before investing in a company, investors can use this document to conduct their due diligence - looking at the company's assets, liabilities, financial performance, risk factors, and commercial potential for growth. The prospectus is updated before the listing date when the IPO price and number of shares are determined through the IPO process.

The prospectus includes information, such as how much money the CEO stands to make when the company makes their public debut, how much money a company intends to raise in their IPO, and what the company plans to do with the money (such as for growth or to pay off debt). It also includes information about a company’s competitors, and importantly, it’s the first time the world gets to take a look at the company’s total financial picture.

The offering price, or issue price, is the final IPO share price that people who have received an allocation pay to receive shares as part of the company’s IPO. The final share price is usually not confirmed until the very last moment once the book-building process is complete. It might be different to the indicative price and is different again to the opening price. Learn more about how share prices are calculated.

The opening share price is the initial cost of one share in a company when it’s first listed on a share market. It’s often different from the offering price of an IPO, which is the price of shares before the company is listed on a share market.

Options refers to financial contracts - called derivatives - that mean buyers have the right, but are not obligated, to buy or sell an underlying asset - such as stock, ETFs, commodities, indexes, interest rates, foreign currencies, or bonds - at a pre-agreed price and on a specified date. This is different from futures, where the buyer must buy the asset at the agreed price and date. There are two option types:

• Calls: Give the buyer the right to buy the asset at a specific price on or before a specific date without being obliged to complete the purchase
• Puts: Give the seller the right to sell the asset at a specific price on or before a specific date without being obliged to complete the sell.

Oversubscribed is when investors have requested more shares in a company during an IPO than there are available, meaning demand exceeds supply. An oversubscribed IPO means investors are keen to buy the company's shares, often leading to a higher IPO share price or more shares offered for sale. This is opposite to an undersubscribed IPO.

Passive usually refers to a passive investment strategy, which means an investment team or fund manager isn't making active investment decisions to try to beat an index. Instead, in a passive strategy, they endeavour to replicate the performance of an index. Because there's no human expertise involved, passive ETFs usually have lower fees. Fans of passive investing point to evidence that in the long run, it's unusual for an actively managed fund to beat an index and they prefer the low fees.

A poison pill is a defence tactic used by companies to prevent a hostile takeover from a person, people or another company whose aim is to take control of a company without board approval. If someone buys 15% or more of a company’s shares, the poison pill can activate, meaning other shareholders could get a discount on new shares, which would dilute the acquirer’s holding in the company, and therefore their ability to take control of it. Courts recognise poison pills as a valid defence against hostile takeovers.

The combined holdings owned by an investor, which is all the company shares and exchange traded funds (ETFs) they own, is called a share portfolio. In its wider context, a portfolio may also include all their other investments, such as real estate, bonds and more.

The price range, or indicative price, is an estimated price range given to potential investors of an IPO to give them an idea of the final price they’ll likely pay for shares. It’s set by both the company and the underwriter. It’s not guaranteed that the final price will be in this range; it’s meant as a guide only for potential investors.

The p/e ratio is a metric that compares the share price to the earnings per share. It can be used with other metrics to show a company’s performance over time, or compare companies in the same industry.

Priced in is a term used to describe a stock's price. It means that the market has already adjusted for the probable impact of positive or negative news affecting a company. For example, when upcoming events or expectations are widely known, they may already be reflected in a stock price. So if investors anticipate a company’s positive earnings, the stock price may already be higher and reflect this expectation. Similarly, if investors expect a company to report negative earnings - losses - the stock price may have already dropped and be priced in. Understand more about how share prices are calculated.

When a company goes public, they list their shares on the primary market where institutional investors, like hedge funds, investment banks and venture capitalists can buy them during the IPO period. After it’s public, anyone can buy and sell shares through a secondary market, known as a share market or stock exchange, such as the Nasdaq or the NYSE.

Profit is the money left after paying expenses. In a company's earnings, there are three main types of profit to look for:

• Gross profit: Remaining money after paying for goods or services a company sells
• Operating profit: What remains after a company also pays operating costs, such as rent, electricity, phones, Wi-Fi and, in some cases, employees or contractors
• Net profit: The final figure that represents what a company made after deducting all costs, debts, and taxes. In other words, net profit is what a company gets to keep.

Investors look at a company’s profit to decide whether it has been successful in the quarter, where:

• Gross profit shows the capability of the company to make money
• Operating profit indicates that that company is making money
• Net profit reveals how much money remains in the hands of the company after taxes and costs

A prospectus, or offer document, must be filed with the relevant stock exchange and be made publicly available, along with the S-1 for listing in the US, before a company can list shares for sale on a share market. Before investing in a company, investors can use this document to conduct their due diligence - looking at the company's assets, liabilities, financial performance, risk factors, and commercial potential for growth. The prospectus is updated before the listing date when the IPO price and number of shares are determined through the IPO process.

The prospectus includes information, such as how much money the CEO stands to make when the company makes their public debut, how much money a company intends to raise in their IPO, and what the company plans to do with the money (such as for growth or to pay off debt). It also includes information about a company’s competitors, and importantly, it’s the first time the world gets to take a look at the company’s total financial picture.

A public company, or publicly traded company, is a company listed on a stock exchange or the OTC markets. Ownership of the company’s stock is divided into shares. Public companies publish annual reports have higher levels of reporting, regulations, and public scrutiny compared to private companies, including being required to disclose financial information about their operations, including revenue, profit and net loss. Going public is another way of saying a company is going through an initial public offering (IPO). It’s a less formal term to describe how a company is moving from private ownership - owned by their founders, financial backers, and employees - to public ownership, where anyone can buy shares in the company on a share market.

Exchange rate, FX.

Investments, emergency fund, savings, nest egg.

Tino kai, tino ora te kōpū — Those who have the produce of their labour stored up will never want for anything
- Whakataukī 

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A quarter is three months in a company’s earnings calendar that measures one quarter of the financial year. Companies listed on the share markets are required to prepare and make public their quarterly earnings reports. Quarters are numbered Q1, Q2, Q3 and Q4, often with the year, eg. Q1 2023. The fiscal year runs from 1 January to 31 December, and fiscal quarters measure Q1 Jan-Mar, Q2 Apr-Jun, Q3 Jul-Sept, Q4 Oct-Dec. Not all companies operate on the fiscal year.

In the US, a quiet period is when the company going through an IPO to list on a share market must be quiet about the business. This is mandated by the SEC and often covers the dates between when documents are filed with the SEC and 40 days after the listing date. The aim is to enable the SEC to review and verify the information they’ve been given, and protect investors by ensuring the company doesn’t falsely inflate their value leading up to the listing date.

Real Estate Investment Trusts, or REITs, enable investors to invest in property through a company - called a REIT - that finances, owns, or operates real estate that generates income. REITs can include cell towers, data centres, commercial and residential property, such as warehouses, retail centres and malls. One of the world’s largest REITs, is ProLogis, which provides warehouses for companies that need shedloads of floor space, such as Amazon, Walmart and DHL.

REITs have special tax status in the US. Their status means they're exempt from paying corporate income tax but must pass on 90% of their profits as dividends to shareholders- some of these can be as high as a nearly 30% dividend yield. This means REITs can suit investors seeking to generate income while they hold shares over the long term. Historically, REITs have been one of the top asset classes in times of high inflation because over time, rents typically rise to help offset this increase. Learn more about REITs.

Ratings, or analyst ratings, are the findings made by analysts about the value of a company’s stock. Ratings can help investors decide whether to buy, sell, or hold an asset, like a company shares. Analysts look at financial performance, industry trends, and a company’s management. Ratings can range from ‘buy’, ‘sell’ or ‘hold’, which may help investors make their investment decisions.

Rebalancing refers to index going through a periodic adjustment of an index’s companies, called constituents or components. Rebalancing involves moving (higher or lower), or adding or removing constituent stocks within an index, such as the S&P 500. This keeps the index relevant and reliable. For example, if an index tracks the tech sector, a rebalance may remove companies that have shifted away from tech, or adding new tech firms. The S&P 500 is rebalanced quarterly, but it may be rebalanced mid-way through a quarter if companies have been impacted by mergers and acquisitions, bankruptcies, or delisting from an exchange, which affect a company’s value.

For IPOs in the US, the S-1, also known as a registration statement, must by law include any material information about the company. This is so potential investors can understand what the company does, why it is issuing shares through an IPO, the state of the company's finances - including revenue, profit and debt -and what type of ownership structure is being offered. This document must be filed with the US Securities and Exchange Commission (SEC) before a company can list shares for sale on the US share markets. There are other ‘S’ versions as well, depending on the type of company going public. In other countries, this might be called a prospectus. The company must provide financial statements as part of these documents.

A retail investor, or everyday investor, is a person - as opposed to an investment firm - who puts money into an investment, such as shares listed on the share markets. They typically do this hoping to make a personal profit through capital gains, returns, or gain an income from dividends. Their decisions are influenced by factors like risk tolerance, investment goals and market conditions. Successful investors do thorough research, keep informed about economic and share market trends, and strategically manage their portfolios.

Between 2019 and 2021, more than 10% of Kiwis started investing shares for the first time. Here are media articles from the time:

• Stuff: What kind of share market investor are you?
• Stuff: What's next for retail investors?

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Real Estate Investment Trusts, or REITs, enable investors to invest in property through a company - called a REIT - that finances, owns, or operates real estate that generates income. REITs can include cell towers, data centres, commercial and residential property, such as warehouses, retail centres and malls. One of the world’s largest REITs, is ProLogis, which provides warehouses for companies that need shedloads of floor space, such as Amazon, Walmart and DHL.

REITs have special tax status in the US. Their status means they're exempt from paying corporate income tax but must pass on 90% of their profits as dividends to shareholders- some of these can be as high as a nearly 30% dividend yield. This means REITs can suit investors seeking to generate income while they hold shares over the long term. Historically, REITs have been one of the top asset classes in times of high inflation because over time, rents typically rise to help offset this increase. Learn more about REITs.

Risk refers to the chance investments might fluctuate - known as share price volatility - which is the short term up and down movement of share values in the share market. Volatility in the share markets is considered usual, and investors need to manage their emotions around risk and volatility.

A roadshow refers to sales presentations the company delivers to large institutional investors before an IPO when they list publicly on a share market. The company's leadership team - the issuer - holds a series of meetings with potential investors to generate interest in their IPO.

The S&P 500 Index a market cap-weighted index, meaning that the companies that make up the index are some of the largest listed on the US share markets. To get on the S&P 500 index, a company must be publicly traded in the United States, meaning there American depositary receipts (ADRs) aren’t included on it. Companies also need to meet requirements for liquidity and have positive earnings for four consecutive quarters, including the most recent quarter. At the time of writing, there are currently 503 securities listed in the S&P 500. This is because it includes three dual-class companies, Alphabet Class A (GOOGL), Class B (GOOG), Fox Corporation Class A (FOXA), Class B (FOX), and News Corp Class A (NWSA), Class B (NWS). The S&P 500 is rebalanced quarterly, in March, June, September and December. This means that the 500 companies on the index are reviewed four times a year to see if they still meet the criteria. Learn more about the S&P 500.

S&P Global Ratings, which is colloquially referred to as 'S&P’, is an abbreviation of Standard & Poor’s, the name the credit rating agency (CRA) was called from 1941 until 2016. S&P is an American CRA based in Manhattan and is part of S&P Global. S&P provides independent credit ratings for various financial instruments, such as stocks, bonds and commodities, and their financial analyses can help investors make informed decisions. Learn more about the S&P 500 index.

The US Securities and Exchange Commission (SEC) is the regulator for the US share markets. The SEC is an independent government agency that aims to protect investors, maintain fair, orderly and efficient markets, and helps facilitate companies’ access to capital. Part of their job is to oversee the process of companies going public through an IPO and making sure they follow the rules.

Another way a company can list their shares on a share market is through a special purpose acquisition company (SPAC). A SPAC is essentially a shell company, or a ‘blank cheque’ company, set up by investors with the sole purpose of raising money on the share markets to merge with a private company and take it public. SPACs can be popular options to list on the share markets because they’re much faster and less complex than a typical IPO process. Companies like Rocket Lab (RKLB), Lucid (LCID) and Enovix (ENVX) have gone public in the US with a SPAC. Read more about SPACs.

Issuer sponsored shares on the ASX have a securityholder reference number (SRN), which identifies the shareholder as the legal owner - the Australian equivalent to New Zealand’s holder number (HN). The issuer sponsored subregister is typically maintained by the company that issues the shares - usually through an appointed share registry. So while a shareholder will have just one holder identification number (HIN) for their entire portfolio for broker sponsored shares, they’ll have a different SRN for each holding for their issuer sponsored securities.

Savings is typically money stored in a bank account, ideally to earn interest but with ‘minimal returns’. Savings are considered one of the lowest risk places to store money, but low risk may mean low returns. Read more about saving vs investing.

A secondary offering is the sale of shares held by early investors of a company that has already gone through an Initial Public Offering (IPO) to list on a share market. This may happen alongside an IPO as an additional secondary transaction. Usually, the company doesn’t receive any cash or issue new shares. Instead, investors buy and sell shares directly from each other.

The legal definition varies between countries, but broadly speaking, a security is a tradable financial asset that holds monetary value, such as stocks, bonds and options.

A share refers to a single unit of ownership in a company or exchange traded fund (ETF). Think of the total value of a company as a pie, and each share is a slice of that pie. Because companies often have high market caps, one person rarely owns the whole thing. So they are broken up into shares: Share price x number of shares = value of the company. While some companies are privately held, owned by founders, financial backers and employees, once a company goes public, anyone can buy and sell their shares in the company through the share markets. Shares are not the same as stocks, but the terms are often used interchangeably.

A share market, or stock exchange, is where buyers - called investors - and sellers trade company stocks, exchange traded funds (ETFs) and REITs. When a company goes public, it’s usually to raise capital (or pay debt), and investors have an opportunity to potentially gain in their profits. Publicly listed companies have shares traded on stock exchanges like the New York Stock Exchange (NYSE) and Nasdaq. While share prices can be influenced by many internal and external factors affecting a company, stock market trends can show the health of a country’s economy, as well as investor sentiment.

The share price is the price you pay for one share (aka one unit of a company’s stock or ETF). A company’s share price can go up and down depending on many things, from the loss of key staff members to a company being the first to fly to space. To calculate the market cap (or total value) of a company, use this equation: Share price x number of shares = value of the company. Learn more about how share prices are calculated.

Shareholders are people or organisations that own shares in a company or exchange traded fund (ETF). Shareholders have a shareholding, meaning they are part-owners of the company.

People own shares hoping that as the company grows their share values grow alongside. Shareholders that own shares in a company or ETF that pays their shareholders dividends, may also receive regular cash payments when the company shares profits with their owners. Shareholders are invited to attend company AGMs, vote on their future decisions and leadership, and potentially influence how a company is run. Some companies have additional benefits for shareholders - the perks of being an owner.

The total number of shares an investor owns in a company or ETF is referred to as a shareholding or holding. The combined shareholdings, which is all the shares they own, is their portfolio. Investors with shareholdings are shareholders.

Despite how they are used in everyday conversation, a stock is not the same as a share. A stock represents ownership in a company as a whole (‘I own a company’s stock’), whereas a share is a unit of a stock (‘I own five shares in a company’s stock’). Does the difference matter? We don’t think so.

A stock exchange, or share market, is where buyers - called investors - and sellers trade company stocks, exchange traded funds (ETFs) and REITs. A stock market can also be known as an equity market. When a company goes public, it’s usually to raise capital (or pay debt), and investors have an opportunity to potentially gain in their profits. Publicly listed companies have shares traded on stock exchanges like the New York Stock Exchange (NYSE) and Nasdaq. While share prices can be influenced by many internal and external factors affecting a company, stock market trends can show the health of a country’s economy, as well as investor sentiment.

A stock split increases the number of shares of a company’s stock while reducing the price per share. This corporate action makes the stock more accessible to investors without changing the company’s market capitalisation. A reverse stock split reduces the number of shares and increases the price per share. This action may be taken by a company’s management to elevate market perception of the stock. Learn more about how share prices are calculated.

A stock symbol, stock ticker, or ticker is a series of 1-5 letters, or an abbreviation, that represents a company or ETF’s stock listed on a share market. They were introduced in November 1867, around the time of ticker tape machines, and were based on a ‘tick’ that shows movement of shares prices going up or down. They made trading across America more accurate and efficient using a shortened version of a company name. Today, some tickers are quirky and inventive, such as: Petco’s Health and Wellness Company’s WOOF, Harley-Davidson’s HOG, Cheesecake Factory CAKE, Dave & Buster's Entertainment’s PLAY, Gorilla Technology Group’s GRRR, Pacer US Small Cap Cash Cows CALF, Steven Madden’s SHOO, Southwest Airlines’ LUV, and Olympic Steel’s ZEUS. Learn more about the history of stock tickers here.

A stop-buy order enables an investor to buy shares at a higher share price than the current price when they place the order. An investor chooses this order if they believe a company has huge growth potential or is undervalued. For example, if a company’s stock has sat around $18 for a while, an investor may put in a stop-buy order to buy shares at $20. This is because they believe once that share price is hit, the floodgates will open, analysts and investors will take notice, and the share price could continue to rise. Stop-buy orders come with risk because share markets are volatile. Over a normal US market day, for example, share prices could swing up or down by 10-20%. This means a stop-buy could be triggered just before the share price starts to drop, so instead of paying a slight premium to buy shares on the way up, investors may have paid top dollar for them. When an investor makes a stop-buy order, it’ll turn into a market order as soon as the share price hits their stop-buy price. This means they’ll get the best available price once the stop-buy order is triggered and the order is placed. So if the price jumps up from $120 to $125 (or $150 etc.) between the order being triggered and the market open, that’s the price they’ll pay to buy the shares. Read more about placing stop-buy orders on Hatch.

An investor may create a stop-loss order to protect any gains, or to reduce any potential losses. For example, if an investor buys stock at $20, and the share price rises to $100. To protect their returns or minimise losses, they may create a stop-loss order for $80 per share, and if the stock drops to $80 or under, the shares will automatically be sold. To reduce the impact of a falling investment, an investor may decide whether a company or industry is sustainable over the long term, and opt to sell at a set price if it gets too low. Many long term investors never use stop-loss orders, however they can play a role in some short-term investing strategies, or when it’s looking like an investment or sector may flop. An example could be a company that boomed over the Covid pandemic, and dropped significantly after it, as happened with Peloton (PTON). Learn more about stop-loss orders.

When an asset, like a share, is held in ‘street name’, it means your brokerage or custodian holds it for you. The name on the certificate belongs to the broker, but you still own the securities. This setup can make trading easier for some investors, and ensures compliance with rules. For example, brokerages and custodians are typically audited every year.

Property, goods, treasure, prized objects. 

Whakataukī: 

He peka kai, he peka taonga — Some food and property, these are what a person needs

To care for, safeguard, keep hold of, or look after for others.

Whakataukī: 

Poipoia te kakano kia puawai — Nurture the seed and it will grow

A ticker, stock ticker, or stock symbol, is a series of 1-5 letters, or an abbreviation, that represents a company or ETF’s stock listed on a share market. They were introduced in November 1867, around the time of ticker tape machines, and were based on a ‘tick’ that shows movement of shares prices going up or down. They made trading across America more accurate and efficient using a shortened version of a company name. Today, some tickers are quirky and inventive, such as: Petco’s Health and Wellness Company’s WOOF, Harley-Davidson’s HOG, Cheesecake Factory CAKE, Dave & Buster's Entertainment’s PLAY, Gorilla Technology Group’s GRRR, Pacer US Small Cap Cash Cows CALF, Steven Madden’s SHOO, Southwest Airlines’ LUV, and Olympic Steel’s ZEUS. Learn more about the history of stock tickers here.

To grow, increase, spring, begin, develop, sprout, prosper.

Whakataukī: 

Hapaitia te ara tika pumau ai te rangatiratanga mo nga uri whakatipu — Foster the pathway of knowledge to strength, independence and growth for future generations

In financial markets, a trade is buying or selling securities, commodities, or derivatives. On a share market like the NYSE or Nasdaq, a trade is when an investor sells shares to another investor. With Hatch, you can place four types of orders:

• Market order - Buying and selling shares in real-time (or when the markets next open)
• Auto-invest - A market order will be placed on your behalf at the frequency you choose, such as ‘the 21st of every month’ or every fortnight, month, quarter, etc
• Limit order - Enter the exact number of shares and price wanted to buy or sell shares; if the share price isn't reached, the order will not be completed‍
• Stop-loss orders and stop-buy orders - Instructions to sell shares if they drop in value to a certain price, called the stop price

The minimum subscription is the lowest amount of IPO shares investors need to buy for a company’s IPO to complete successfully and list on a share market - typically 90%. If the threshold isn’t met for a minimum subscription, it’s considered an undersubscribed IPO - where supply is greater than demand. While it’s not common, the company returns the money from the orders placed. An undersubscribed IPO can be due to poor promotion, overpricing, or share market or economic conditions at the time. It can also be referred to as underbooking. This contrasts with an oversubscribed IPO.

Underwriters are investment banks like Morgan Stanley or JP Morgan that work closely with companies to manage the end-to-end IPO process. They help decide the initial offering price, promote the IPO in a roadshow and distribute shares to investors. They reduce the company’s risks during the IPO process by agreeing to assume the risk of buying all or a portion of the shares to be issued in the IPO and then selling those to the public at the IPO price. But of course, they command big fees for doing so.

Volatility refers to how much the price of an asset, such as a stock or cryptocurrency, can go up or down in value. When an asset is considered volatile, its price can change rapidly in either direction. Investors often consider volatility when making decisions about buying or selling assets. High volatility can mean higher risk but also potentially higher returns.

Show me the money 🤑

To plan or chart your path.

Whakataukī:

Whāia te iti kahurangi ki te tūohu koe me he maunga teitei — Aim for the highest cloud so that if you miss it, you will hit a lofty mountain

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Year-over-year, or YOY, compares performance of a stock, ETF or REIT today with the previous year, that is, 12 months ago. Analysts and companies commonly use YOY comparisons to look at growth or declines, trends, and to understand whether a company’s or ETF’s strategy or decisions have been successful. Understanding year-over-year changes is valuable for investors who want to understand performance and progress of an investment over time.

Year-to-date, or YTD, refers to the time from the beginning of the current calendar year up to the current date, usually from 1 January up to today. YTD provides a snapshot of progress so far in the year. It’s useful for looking at business trends, comparing how stocks are tracking against other stocks or their own stocks performance one year ago - that is have they gone up or down - and calculating things like returns and a company’s market cap.