Three-minute lessons to read the market: one idea, an example to play with, two questions to check.
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A stock means owning a small piece of a company.
Four lessons to read any page.
Each word with what it means, an everyday example, and what it cannot prove alone.
It is the percentage charged each year to operate the fund. It directly reduces what the investor keeps.
Example: A 0.25% TER costs about $25 a year on $10,000 invested, before investment returns.
Limit: The fund does not always show a separate bill: the fee is generally deducted gradually from its value.
It is the total value of money and investments managed by the fund.
Example: Like the size of the shared money pot entrusted to the manager.
Limit: A large fund is not automatically better; also check fees and holdings.
It estimates whether a stock usually moves more or less than the market.
Example: Beta of 1.5: when the market moved 2%, the stock often moved about 3% either way.
Limit: It measures the past; it does not promise the next move.
It compares borrowed money with the money that truly belongs to shareholders.
Example: 1.5 means about $150 of debt for $100 of equity.
Limit: Normal levels differ by sector; a bank and a store should not be compared the same way.
It describes a possible future where the company faces difficulties.
Example: Costs rise while customers buy less.
Limit: This scenario helps you prepare; it does not predict the future.
Some companies share part of their profits with people who own their shares.
Example: $0.25 paid four times a year gives $1 per share annually.
Limit: A dividend can be reduced or stopped; it is never guaranteed.
It is the part of total profit that belongs to one share.
Example: $100 of profit across 20 shares gives EPS of $5.
Limit: Look across several years: one good quarter can be exceptional.
It is a basket that can hold many stocks, bonds, or other investments.
Example: Like buying a box of many colored pencils instead of one pencil.
Limit: A basket can still be concentrated in a few companies or one sector.
It is an expected event that may quickly change market opinion in either direction.
Example: Quarterly results, a court decision, or a product launch.
Limit: The event may disappoint or already be reflected in the price.
It describes a possible future where sales, profit, or conditions improve.
Example: Demand rises and the company produces enough to meet it.
Limit: It is a hypothesis to test, not a promise.
It is the cash left after the spending needed to run the business.
Example: Like your pocket money after paying for transport and lunch.
Limit: A positive amount helps, but check whether it repeats over time.
One score that groups several company signals. 53 out of 100 means “middle of the road,” not “good buy.”
Example: Like a school report: the average combines several subjects, but you must open the details to see strengths and weaknesses.
Limit: This score is not a probability of profit and is not enough on its own to justify an alert.
A liquid investment usually finds a buyer or seller quickly without a large price gap.
Example: A bottle of water is easier to resell than a rare custom-made object.
Limit: Low liquidity can make the displayed price hard to obtain in practice.
It compares a fast and a slow average to show whether movement is gaining or losing strength.
Example: Like comparing a fast bicycle with a slow one to see which is pulling ahead.
Limit: The signal can arrive after the move and should be read with price and volume.
It is one share’s price multiplied by the number of shares.
Example: 10 million shares at $20 give a market value of $200 million.
Limit: This is not cash in the company’s bank account.
It shows how much profit remains after all expenses.
Example: A 12% margin: about $12 remains as profit from $100 of sales.
Limit: Compare it mainly with companies in the same business.
It adds or subtracts volume depending on whether price rises or falls.
Example: Like counting people entering a stadium and subtracting those leaving.
Limit: It helps confirm a move; alone, it does not say what to do.
It compares a share’s price with the profit the company earns for that share.
Example: P/E of 20: the market pays about $20 for $1 of annual profit.
Limit: A low number is not always a bargain; the company may also have problems.
It summarizes whether investors currently prefer risk or caution.
Example: Like choosing between playing outside in the rain or staying sheltered.
Limit: Mood can change quickly and does not make every stock the same.
It shows how much the company earns with shareholders’ money.
Example: ROE of 15%: $100 of equity produced about $15 of profit.
Limit: Heavy debt can inflate this number; check debt too.
A gauge from 0 to 100 that measures the speed and strength of recent price moves.
Example: Like a runner who sped up quickly: they may continue or slow down; the gauge cannot decide for them.
Limit: Above 70 or below 30 does not automatically mean sell or buy.
It smooths recent prices to make the direction easier to see.
Example: SMA 20 = average of the last 20 closing prices, like the average of 20 grades.
Limit: It looks backward and reacts late; it is not a prediction.
It counts shares that changed hands during a period.
Example: Like the number of people using a checkout: a larger number means more activity.
Limit: High volume says something is happening, not whether the news is good or bad.
It measures the change between January 1 and today.
Example: From $100 in January to $108 today: about +8% year to date.
Limit: It restarts every year and does not show the investment’s full history.
PRESTIGE