Question

Stock Market Vocabulary and Definitions
Use the vocabulary to fill in the blanks. Understanding Stocks REQUIRED
VOCABULARY

bear market
bull market
diversification
dividends
portfolio
private
publicly owned
risk
stock
stockbroker
stockholder
stock exchange
stock market


A ___________________________ company is owned by stockholders or shareholders.
A ___________________________ is an individual who has purchased a share, or many shares, of stock in a publicly owned company.
A ___________________________ company is owned by an individual or a small group of individuals.
A ___________________________ market describes the downward trend of the stock market over a number of months.
A ___________________________ acts as a go-between for the buyer and seller of stocks.
A ___________________________ market describes the trend of the stock market rising over a number of months.
The strategy of owning different stocks in various industries that perform differently under a variety of economic conditions is known as ___________________________.
The percentage of profits that are paid to stockholders periodically are called ___________________________.

The probability of making a profit or losing money on an investment is known as ___________________________.
___________________________ is a share of the ownership of a company.
Stocks are bought and sold on the ___________________________.
A ___________________________ is a grouping of financial assets such as stocks,
bonds, and cash equivalents.


REQUIRED JA Take Stock in Your Future Understanding Stocks
Reflect
“Those who ‘play’ the stock market as if it were a game will lose. Those who respect it
as a force of nature will prosper, but only so long as they are humble and patient.”
—Jason Zweig, author of The Devil’s Financial Dictionary, 2015
1. What are your reactions to or thoughts about Zweig’s comment, considering what you have learned so far about investing?
Answer
2. How would you rate your current understanding of the stock market and the benefits and challenges of investing in publicly owned companies? Why?
Answer

Answer 1

A publicly owned company is owned by stockholders or shareholders.
A stockholder is an individual who has purchased a share, or many shares, of stock in a publicly owned company.
A private company is owned by an individual or a small group of individuals.
A bear market describes the downward trend of the stock market over a number of months.
A stockbroker acts as a go-between for the buyer and seller of stocks.
A bull market describes the trend of the stock market rising over a number of months.
The strategy of owning different stocks in various industries that perform differently under a variety of economic conditions is known as diversification.
The percentage of profits that are paid to stockholders periodically are called dividends.
The probability of making a profit or losing money on an investment is known as risk.
Stock is a share of the ownership of a company.
Stocks are bought and sold on the stock exchange.
A portfolio is a grouping of financial assets such as stocks, bonds, and cash equivalents.

Reflect
1. My reaction to Zweig’s comment: It’s a useful reminder that the stock market isn’t a game to win quickly. Treating it as such invites emotional, impulsive decisions and higher losses. Respecting the market means understanding risk, using diversification, doing your research, and being patient with long-term goals. Humility matters because markets are unpredictable and no one can time them perfectly.

2. How I’d rate my current understanding: I’d rate it as fairly good for the basics (about 7/10). I understand what stocks are, how dividends, diversification, and risk work, and the differences between bull and bear markets and private vs. publicly owned companies. I want to improve my skills in company valuation, reading financial statements, and advanced strategies (tax implications, options, and market timing) to move toward a higher level of confidence.