Capital Market Portfolio

A

Anchoring: The tendency to rely too heavily on the first number you saw — such as the price you paid or a stock's past high — when judging what something is worth now.
Asset Allocation: The way a portfolio is divided among broad categories of investments, such as stocks, bonds, and cash, generally driven by an investor's time horizon and risk tolerance.
Asset Class: A broad grouping of investments that share similar characteristics and tend to behave similarly in the market, such as equities, fixed income, real estate, or cash.

Bear Market: A sustained decline of 20% or more from a recent market high, typically accompanied by widespread pessimism.
Blockchain: A shared, cryptographically linked record of transactions maintained across many independent computers rather than by a single central authority.
Blue-Chip Stock: Shares of a large, well-established, and typically financially stable company with a long track record of operation.
Bond: A debt instrument in which an investor loans money to a government or company in exchange for periodic interest payments and the return of principal at maturity.
Bull Market: A sustained period of rising prices, typically accompanied by investor optimism and above-average economic growth.

Call Option: A contract giving its buyer the right, but not the obligation, to buy an underlying asset at a set strike price before or at expiry.
Capital Gain: The profit realized when an investment is sold for more than its original purchase price.
Compounding: The process by which investment returns generate their own additional returns over time, causing growth to accelerate the longer money stays invested.
Confirmation Bias: Seeking out and giving more weight to information that supports what you already believe, while discounting evidence against it.
Correction: A decline of 10% to 20% in a market index or security from a recent high, generally considered a normal part of market cycles.

Disposition Effect: The observed tendency of investors to sell investments that have risen too early and hold on to investments that have fallen for too long.
Diversification: The practice of spreading investments across different assets, sectors, or geographies to reduce exposure to the poor performance of any single holding.
Dividend: A portion of a company's earnings distributed to shareholders, usually paid in cash on a quarterly basis.
Dividend Yield: A company's annual dividend per share divided by its current share price, expressed as a percentage.
Dollar-Cost Averaging: An investment strategy of investing a fixed amount of money at regular intervals, regardless of the asset's price at each interval.

Earnings Per Share (EPS): A company's net profit divided by its number of outstanding shares, used as a measure of profitability on a per-share basis.
ETF (Exchange-Traded Fund): A fund that holds a basket of securities and trades on an exchange throughout the day, much like an individual stock.
Expense Ratio: The annual fee a fund charges its investors, expressed as a percentage of assets under management, covering management and operating costs.
Expiry Date: The date on which a derivatives contract (futures or options) stops trading and is settled, either in cash or through delivery of the underlying asset.

FOMO (Fear of Missing Out): Anxiety that others are profiting from something you are not part of, which can push people to buy after a large rise without their usual checks.
Futures Contract: A standardized agreement to buy or sell an underlying asset at a predetermined price on a specified future date.

Herd Behaviour: Following what many other investors are doing rather than relying on your own analysis, which can amplify booms and sell-offs.

Index Fund: A fund designed to track the performance of a specific market index, such as the S&P 500, by holding the same or similar securities in similar proportions.
Inflation: The rate at which the general level of prices for goods and services rises over time, eroding the purchasing power of a given amount of money.

Leverage: The use of borrowed capital or a margin deposit to control a position larger than the cash actually put up, which amplifies both potential gains and potential losses.
Liquidity: How quickly and easily an asset can be bought or sold in the market without significantly affecting its price.
Loss Aversion: The finding from behavioural research that losses tend to feel more painful than gains of the same size feel good, which can lead to overly cautious or panicky decisions.

Margin: The amount of capital an investor must deposit to open and maintain a leveraged position, such as a futures contract, as opposed to paying the asset's full value.
Market Capitalization: The total value of a company's outstanding shares, calculated by multiplying the current share price by the number of shares outstanding.
Mental Accounting: Treating money differently depending on where it came from or which mental 'bucket' it sits in, even though every rupee is interchangeable.
Mutual Fund: A pooled investment vehicle that collects money from many investors to purchase a diversified portfolio of securities, priced once per day after markets close.

Options Contract: A contract giving its buyer the right, but not the obligation, to buy (a call) or sell (a put) an underlying asset at a set price before or at expiry.
Overconfidence: Overestimating your own knowledge or ability to predict outcomes, often linked in research to trading more frequently and earning less after costs.

P/E Ratio (Price-to-Earnings): A valuation measure calculated by dividing a company's share price by its earnings per share, often used to gauge how expensive a stock is relative to its profits.
Paper Trading: Practicing buying and selling with simulated, virtual money rather than real funds — used to learn how markets and order mechanics work without financial risk.
Portfolio Rebalancing: The process of buying or selling assets within a portfolio to restore its allocation to a previously set target mix after market movements have caused it to drift.
Put Option: A contract giving its buyer the right, but not the obligation, to sell an underlying asset at a set strike price before or at expiry.

Recency Bias: Giving too much weight to recent events and assuming they will continue, such as expecting a recent strong rally or sharp fall to carry on.
Risk Tolerance: An investor's personal capacity and willingness to endure fluctuations in the value of their investments in pursuit of potential returns.

Sector: A grouping of companies that operate in the same broad area of the economy, such as technology, healthcare, or energy.
Share Buyback: When a company repurchases its own shares from the marketplace, reducing the number of shares outstanding and often increasing earnings per share.
Strike Price: The fixed price at which an options contract allows its holder to buy (call) or sell (put) the underlying asset.
Sunk Cost Fallacy: Continuing with a decision because of what you've already put into it, rather than judging it on what is likely to happen from here.

Time Horizon: The length of time an investor expects to hold an investment before needing to access the funds, a key input into asset allocation decisions.
Total Return: The overall gain or loss on an investment over a period, combining both price appreciation (or decline) and any income received, such as dividends or interest.

Volatility: A statistical measure of how much the price of an asset fluctuates over time; higher volatility generally reflects larger and more frequent price swings.

Yield Curve: A line plotting interest rates of bonds with equal credit quality but differing maturity dates, widely watched as an indicator of economic expectations.