Concept

Earnings

A company’s profit after all its costs, interest and taxes. Earnings per share (EPS) divides that profit by the number of shares, so companies of different sizes can be compared.

Why we track it

Over long stretches, stock prices follow earnings. Quarterly results and forecasts are often what move a single stock the most.

Asset allocationHow a portfolio is split among kinds of investments, such as stocks, bonds and cash.
BacktestingTesting an investing rule on historical data to see how it would have performed before putting money behind it.
Basis pointOne hundredth of a percentage point (0.01%), often written bp.
Bear marketA fall of roughly 20% or more from a recent peak, usually over several months.
Bull marketA long stretch of rising prices across a market, often dated from a 20% rise off a low.
Business cycle stagesThe economy’s long rise and fall: years of growth, a slowdown, sometimes a recession, then recovery.

Why we track it

Related terms