Novice Investing - Investing Guide For Novice Investors

Date: Tuesday 13th 2008f May 2008 09:24:29 AM

Glossary

January Effect: A phenomenon occurring during the month of January where investors sell stocks that have been going up and offset it with another stock that has dropped for tax purposes.

Our take: The reason why it happened in January is that because investors who had been wanting to sell stocks previously, wait until the beginning of the year so that they will pay their taxes on April of next year.

Job Hunting: Refer to the time period where a candidate is looking for work

Our take: During this period, an individual will seek job posting sources from variuos media such as newspapers or the internet and try to land as much interview as possible.

Job Opening: The number of jobs that employers are currently wanting to hire.

Our take: Large job openings means a strong job market, which enables job seekers to demand hire salary.

Joint Account: A saving or brokerage account that is owned jointly by more than one individual.

Our take: The joint account agreement will clarify further the nature of the account. Some party may have more authorities than the other and some may not.

Jumbo CD: A certificate of Deposit with a minimum investment of $ 100,000.

Our take: As you might have guessed, Jumbo CD is a lot more common among institutional investors such as insurance or pension fund.

Jumbo Loan: Any residential or commercial loans that exceed the guidance set by Fannie Mae and Freddy Mac.

Our take: Jumbo loans are perceived to have a higher risk and therefore the interest rate on this loan is quite high.

Junk Bond: Bond that has a lower rating than BB.

Our take: Bond rating is calculated based partly on the ability of the borrower to pay interest and the principal. When cash flow of the borrower is solid, it is normally assigned a higher rating. Therefore, lower rating bond is a more speculative investment since the risk of default can be higher than high AAA rating bond.

Just In Time (JIT) method: An efficient manufacturing method pioneered by Toyota Motor.

Our take: As the name implies, producer keeps inventory level that is exactly needed for the production. As less inventory is needed, capital structure improves and profitability increases due to less waste produced from inventory pile-up.

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