Investing glossary
Plain-language definitions of the investing terms you meet in filings, in the news and in Finzer.
25 terms, all of them on this page
P
Passive Investing
Passive investing is a strategy that tracks a market index through low-cost funds with minimal trading. Learn how it works, why it wins over time, and how to use it smartly.
Payback Period
The payback period measures how long it takes for an investment to recover its initial cost from cash flows. Learn how to calculate it, when it matters, and where it can mislead investors.
Payout Ratio
A payout ratio shows what percentage of a company’s earnings are paid out to shareholders as dividends. Learn how to interpret it, what drives it, and how investors actually use it.
Peer Group
A peer group is a set of comparable companies used to benchmark performance, valuation, and strategy. Learn how investors build peer groups, why they matter, and how to use them without fooling yourself.
PEG Ratio
The PEG ratio compares a stock’s price-to-earnings multiple to its expected earnings growth rate. Learn how to use it to spot growth stocks that are cheap-or traps that only look cheap.
Penny Stock
A penny stock is a publicly traded company whose shares typically trade below $5, often with low market capitalization and limited liquidity. Learn how penny stocks work, why they’re risky, and how experienced investors approach them.
Portfolio
A portfolio is the collection of assets-stocks, bonds, cash, and alternatives-that an investor owns and manages as a single unit. Learn how portfolios are built, what drives their performance, and how to actually manage one like a pro.
Portfolio Construction
Portfolio construction is the process of selecting assets and deciding position sizes to balance risk and return in an investment portfolio. Learn how professionals build portfolios, what drives allocation decisions, and how to apply it yourself.
Portfolio Theory
Portfolio theory explains how combining assets can reduce risk without sacrificing returns. Learn how diversification, correlation, and risk trade-offs actually work in real portfolios.
Portfolio Volatility
Portfolio volatility measures how much the value of your entire portfolio fluctuates over time, typically using standard deviation of returns. Learn what drives it, how to calculate it, and how smart investors manage it without killing returns.
Position Sizing
Position sizing is the process of deciding how much capital to allocate to a single investment, typically expressed as a percentage of your portfolio. Learn how to size positions intelligently to control risk, avoid blow-ups, and compound returns.
Price to Book Ratio
The price to book ratio compares a company’s stock price to its net asset value per share. Learn how to use it to spot value, avoid traps, and apply it correctly by industry.
Price-to-Book Ratio (P/B)
The price-to-book ratio compares a company’s market value to its accounting book value. Learn how to use P/B to spot value traps, asset plays, and mispriced stocks.
Price-to-Earnings Ratio
The price-to-earnings (P/E) ratio compares a company’s stock price to its earnings per share. Learn how investors use it to judge valuation, spot risks, and avoid common traps.
Price-to-Earnings Ratio (P/E)
The price-to-earnings ratio (P/E) compares a company’s stock price to its earnings per share. Learn how to interpret it, what drives it, and how investors actually use it.
Pricing Power
Pricing power is a company’s ability to raise prices without losing customers or sales volume. Learn how to spot it, why it drives long-term returns, and how investors should actually use it.
Primary Market
The primary market is where new securities are created and sold directly by issuers to investors. Learn how IPOs, bond issues, and capital raises actually work-and how investors can participate smartly.
Private Equity
Private equity is capital invested directly into private companies or used to take public companies private, typically through long-term, hands-on ownership. Learn how private equity works, why returns can be high, and what it means for everyday investors.
Producer Price Index
The Producer Price Index measures average changes in prices received by producers for goods and services over time. Learn how PPI works, what drives it, and how investors actually use it.
Productivity
Productivity measures how much output is produced for a given amount of input, like labor or capital. Learn why productivity drives profits, wages, market returns, and long-term investing outcomes.
Profitability Ratios
Profitability ratios measure how efficiently a company turns revenue into profit using margins and return metrics. Learn how to read them, compare companies, and avoid common traps.
Prospectus
A prospectus is a legally required disclosure document that details a company or fund offering securities to investors. Learn how to read one, what triggers it, and how smart investors actually use it.
Pullback
A pullback is a short-term decline of roughly 5%-10% in an asset after a recent rise. Learn why pullbacks happen, how to spot them, and how smart investors use them.
Purchasing Power
Purchasing power measures how much real goods and services your money can buy, adjusted for inflation. Learn how it erodes, how investors track it, and how to protect portfolios when it falls.
Put/Call Ratio
The put/call ratio measures the volume of put options traded relative to call options, showing how bearish or bullish options traders are. Learn how to interpret it, key thresholds, and how investors actually use it.