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Plain-language reference

The Investing Dictionary

Clear, cross-linked explanations of the terms you meet while learning to invest. Start with a word, not a recommendation.

  • C
  • Capital Gain

    A capital gain is the increase recognized when an asset is sold for more than its relevant cost basis.

  • Compound Interest

    Compound interest is interest earned on principal plus previously credited interest.

  • D
  • Dividend

    A dividend is a distribution a company makes to shareholders, commonly in cash or additional shares.

  • M
  • Market Capitalization

    Market capitalization is the market value of a company's outstanding equity shares.

  • P
  • P/E Ratio

    The price-to-earnings ratio compares a share's market price with earnings per share.

  • V
  • Volatility

    Volatility describes how widely and rapidly an investment's price or returns fluctuate.