At Folionet, we believe that financial education is the foundation for making smart and safe decisions. That's why we have prepared a glossary with the most relevant concepts from the world of investing and global markets. This resource is designed for our clients to clearly understand the terms they will encounter on the platform and in their daily operations, strengthening their confidence and autonomy when investing.
A stock that has been removed from a major exchange, such as NYSE or Nasdaq, generally for failing to meet regulatory or financial requirements. Although they may continue to be traded on over-the-counter (OTC) markets, these stocks tend to have lower liquidity and higher risk.
A type of asset that combines characteristics of common stocks and bonds. Investors who acquire them typically receive higher dividends than bonds and have capital priority in the event of company liquidation. They generally offer higher yields than bonds, but less than common stocks.
Certificates that allow investors with U.S. investment accounts to buy shares of foreign companies that are not listed directly on U.S. exchanges. Common for companies operating in Europe and Asia.
Refers to the total amount of money a financial institution manages on behalf of its clients.
A reference index used to compare the performance of an investment.
Assets backed by real property. Those who invest in them can expect to receive income from dividend payments.
Basic products such as food, beverages, household and personal hygiene products.
A debt instrument issued by a company to raise capital. The investor receives a predetermined number of interest payments at a fixed or variable rate.
Bonds with a credit rating below BBB-, considered higher risk by agencies such as S&P and Moody's. They offer high returns but involve significant risks of default, volatility, and loss of value, especially in adverse economic environments.
A debt instrument issued by a government to fund its expenses. U.S. government bonds, for example, are considered very low risk as they are backed by the government that issues them.
Companies with a long track record, global consumer base, and asset value above $10 billion.
Companies with a solid track record and asset value between $2 billion and $10 billion.
Smaller companies with asset values between $300 million and $2 billion, generally focused on local markets.
When a company files for Chapter 11 of the U.S. Bankruptcy Code, it initiates a court-supervised financial reorganization process. This does not imply the immediate closure of the company, but does indicate significant financial difficulties. Shares of these companies tend to be highly volatile and carry elevated risk.
Companies that produce non-essential goods and services such as automobiles, clothing, entertainment, hotels, and restaurants.
A strategy that involves spreading investments across different assets to reduce risk.
Companies engaged in the exploration, extraction, and processing of oil and gas.
Companies focused on the production of renewable and sustainable energy.
A fund that groups various assets under a single ticker symbol and trades on an exchange like a stock. It may include stocks, bonds, or derivatives.
A classification indicating lower default risk in bonds, awarded by credit rating agencies.
The process by which a company offers its shares to the public for the first time on a public exchange.
The ease with which an asset can be converted into cash without affecting its price.
Financial instruments whose value depends on the price of an underlying asset. They can involve high volatility and risk due to the use of leverage.
An indicator showing the return generated by dividends and interest over the last year, relative to the asset price.
An estimate of the annual return based on recent dividend payments.
Risk that affects the entire market or sector, not just a specific company.
Companies that offer medical services, insurance, equipment, and health-related products.
Companies that design and manufacture chips and electronic components.
Companies that provide essential services such as water, electricity, gas, and sanitation.
Companies that offer banking, insurance, and financial intermediation services.
The difference between the bid price (buy) and the ask price (sell) of an asset.
Companies engaged in the research, development, and distribution of technology products and services.
A fixed-income investment that generates interest income through pools of residential mortgages. Considered safe because they are backed by underlying properties.
A measure of the variation in the price of an asset over a given period.
