adding to your position

When you already own shares of a given stock, "adding to your position" means buying more shares. This action could either lower or raise your basis.

ADR

American Depository Receipts. These are "receipts" for shares of stocks of non-U.S. companies that are held by U.S. banks and sold to American investors who prefer not to deal with foreign stock exchanges.

aggressive

An aggressive investment approach seeks rapid growth, and is willing to take on greater than normal risk in pursuit of that growth.

American Stock Exchange

The second largest stock exchange in the United States (NASDAQ is not technically an exchange). Also known as the AMEX, the American Stock Exchange hosts a variety of popular ETFs (exchange-traded funds).

analyst

Wall Street research firms employ analysts to each thoroughly follow a handful of stocks. These analysts issue research reports with upgrades and downgrades based on their changing opinions of the stocks they cover.

Each year, companies must issue an annual report. In it are all of the company's financial data, as well as its prospects for the future.

A highly-advanced investment technique in which large institutional investors profit from momentary price disparities between the same security trading on two different exchanges.

Percentage of a portfolio's holdings in each of several asset classes. For example, a sample asset allocation may be 60% stocks, 35% bonds, and 5% cash.

The price a market maker or specialist is willing to pay for a stock.

This is the average that you paid for a stock. For example, if you bought 100 shares at $30 and 100 more at $35, your basis would be $32.50. If you then bought 50 more at $37, your basis would rise to $33.40. ($30 * 100) + ($35 * 100) + ($37 * 50) = $8350 / 250 shares = $33.40.

Bearishness indicates negative sentiment. If you are a bear on a stock, that means you think it is headed lower. A "bear market" is a market in which most stocks are falling lower.

This is a measure of a stock's volatility. The average beta is 1.0, so anything higher than that means greater volatility, and anything lower than 1.0 means less volatility than the market average (as exemplified by the S&P 500). So, if the general market were to go up by 10%, a stock with a beta of 1.5 would be expected to go up by 15%. If the general market were to go down by 5%, a stock with a beta of 0.5 would be expected to go down by only 2.5%.

bid

The price at which a market maker or specialist is willing to sell a stock.

The term "blue chip" refers to stocks that are thought to be of high quality. There is no absolute consensus on what makes a stock a "blue chip," but most would agree that any stock in the Dow Jones Industrial Average are blue chip stocks. This does not mean that they are bullish on these stocks, but rather, that they are companies that have stood the test of time and are almost guaranteed to be around another 50 years or longer.

The board of directors is elected by shareholders to watch over the corporation's officers and managers. The BOD hires and fires the CEO, the CEO hires and fires the managers, and the managers hire and fire the general workforce. Of course, if things don't go well, the shareholders have the ability to "fire" the BOD by electing replacement directors.

When a stock or the market is said to have bottomed, it is thought that it cannot go any lower, and therefore, is likely to rebound and go higher.

bullish

Bullishness indicates positive sentiment. If you are a bull on a stock, it means you predict it to go higher. A "bull market" is a market in which most stocks are going higher.

business cycle

The predictable cycles of economic activity that repeat over time. The five stages of the business cycle are growth, peak, recession, bottom (or trough), and recovery.

buy and hold

This is a strategy that suggests it is best to buy stocks and hold on to them through ups and downs.

buying on dips

A "dip" is a momentary "hiccup" in a stock's price. Therefore, buying on dips is the idea that it is best to buy stocks when they experience temporary weakness, since you get more shares for your money when a stock's price is lower.