There's so much jargon associated with investments that it can feel a little intimidating at times. Don't worry. You don't have to be a PhD in finance to hold your own when discussing the stock market. All it takes is knowing a few basics.
Learning some key financial terms will not only help you talk the talk, but it can better enable you to walk the walk of making sound investment decisions.
Take P/E ratioGlossary: A stock's price divided by its earnings per share: how many dollars investors pay for each dollar the company earns. A forward P/E uses expected earnings for the next year instead of the last one., for example. It's simple math, but it unlocks some of the fundamental truths about why some investments succeed and others fail.
Not only that, but a few questions about P/E ratio can reveal how much the people you're talking to really know about their stocks.
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