First of all, big thank you to all the friends who checked out the blog yesterday! Thanks to some valuable feedback there is a new glossary page up on the site. There you’ll find explanations of phrases I commonly use on the site and I’ll keep adding as new phrases come up.
For now it features definitions such as:
Long – Buying a stock you assume will increase in value. I.e. You buy Apple at $500 and sell it for $520 (and make a $20 profit). This is the most basic investing move. Winning strategy: Buy low, sell high.
Short – Selling a stock with the agreement to buy it back at a different price. Let’s say I buy Apple at $520 now, assuming the price is going to fall. I get $520 up front, but I have to buy it later so I have something to sell. If the price drops to $500, I make a $20 profit. Winning strategy: Sell high, buy low.
Bull – Bulls are optimistic about prices going up. A bull market is one where prices are going up and sentiment is good. Longs like bull markets. Reminder: a bull’s horns point upwards.
Bear – Bears are pessimistic and assume prices will fall. A bear market is one where prices are going down and sentiment is bad. Shorts like bear markets. Reminder: A bear drops to the ground.
Hope everyone has a wonderful holiday weekend!