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Investment Glossary
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the graphing and analysis of market variables - particularly share prices and market averages. Technical analysts believe they can make superior returns by studying only market movments. The 'opposite' view is Fundamental Analysis.
Technical Analysis
a temporary downturn in the price of a company's shares or in the market itself following a period of extensive price increases. A technical correction takes place in a generally increasing market when there is no particular reason that the increases should be interrupted, other than the fact that investors have temporarily slowed securities purchases.
Technical correction
life insurance in which the insurance company pays a specified sum if the insured dies during the coverage period. Term insurance includes no savings, cash values, borrowing power, or benefits at retirement. On the basis of cost, it is the very least expensive life insurance available, although policy prices can vary significantly between firms. Click to LifeQuote from MoneyOnLine
Term insurance
the number of years over which the issuer of debt promises to meet the requirements of the loan. Bonds with longer terms to maturity are subject to greater price fluctuations than short-term securities.
Term to maturity
a security that trades with little volume. Institutional investors normally exclude these securities from their portfolios because of the large price changes that would occur if trades of any significant size took place.
Thin market
restricted credit creating a period of relatively high interest rates. Tight money generally has a negative effect on security prices, at least in the short run.
Thinly traded security
a market for a security in which there are relatively few offers and bids. A thin market causes reduced liquidity and makes it more difficult to buy or sell the security without affecting its price.
Tight money
the time interval over which an investment program is to be completed. An investor's time horizon is very important in determining the types of investments that should be selected. For example, investments that would be appropriate for an individual's retirement in 30 years are seldom suitable for reaching a short-term goal. - Also called horizon.
Time horizon
the concept that a dollar received sooner is more valuable than a dollar received later. Time value of money is dependent not only on the time interval being considered but also the rate of discount used in calculating current or future values.
Time value of money
dividend or interest income plus any capital gain. Generally considered a better measure of an investment's return than dividends or interest alone.
Total return
the national excess of imported goods and services over exported goods and services. Large trade deficits may result in unemployment and a reduction in economic growth in the country with the deficit.
Trade deficit
the excess of exported goods and services over imported goods and services. A trade surplus increases economic activity in a country but also may result in higher prices and interest rates if the economy is already operating at near capacity.
Trade surplus
the expense incurred in buying or selling a security. Transaction costs include commissions, markups, markdowns, fees and any direct taxes. Transaction costs, of special significance to investors who frequently trade securities, can vary significantly depending on the firm with which the investor conducts business.
Transaction costs
analysis of a variable's past value changes to determine if a trend exists and if so, what the trend indicates. A technical analyst may graph a share's price over a period of time to determine if a trend has been established. Analysts often attempt to determine if trends exist for a firm's earnings per share.
Trend analysis
in technical analysis, a straight line or two parallel straight lines indicating the direction in which a security has been moving, and, many chartists believe, will continue to move. When a security price breaks through a trendline, the beginning of a new trend is indicated.
Triple witching hour
the hour before the market closing when options and futures on share indices expire on the same day, thereby setting off frenzied trading in futures, options and underlying securities. Traders and arbitrageurs unwind investment positions and this can produce large price movements in securities.
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