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๐ Keiko's Investor Glossary
Plain English definitions โ no finance degree needed! ๐ธ
๐ RSI โ Relative Strength Index
A number from 0โ100 that tells you if a stock has been bought too much or sold too much lately. Think of it like a thermometer for a stock's energy level.
๐ด Above 70 = Too hot (overbought) ยท โช 30โ70 = Normal ยท ๐ข Below 30 = Too cold (oversold = possible bargain)
๐ฐ P/E Ratio โ Price to Earnings
How much you're paying for $1 of a company's profit. Lower is usually better. If a company earns $1 per share and the stock costs $12, the P/E is 12ร.
Under 10ร = Bargain ๐ข ยท 10โ15ร = Good value โ
ยท 15โ20ร = Fair ๐ก ยท Above 20ร = Expensive ๐ด
๐ต Dividend โ Getting Paid to Own a Stock
Some companies pay you cash just for holding their stock, like rent from a house you own. A 5% dividend on a $100 stock = $5/year per share paid to you automatically.
5%+ = Excellent ๐ ยท 3.5โ5% = Good โ
ยท 2โ3.5% = Average ยท Under 2% = Low
๐ฆ FCF โ Free Cash Flow
The actual cash a company has left over after paying all its bills. A company with strong FCF can keep paying dividends even in tough times. The blue bar shows strength (5 = Excellent).
Think of it like a family's savings after paying rent, groceries, and all bills. More savings = more secure!
๐ฏ๐ต ADR โ American Depositary Receipt
Japan stocks (Toyota, Sony, etc.) trade on US markets as ADRs โ they're priced in US dollars so you can buy them without a Japanese brokerage account.
Toyota's US symbol is TM ยท Sony is SONY ยท Buffett's favorite Mitsubishi is MSBHF
๐ฑ VIX โ The Fear Index
Measures how scared or calm the market is. High VIX = people are nervous and selling. Low VIX = people are calm and confident. Watch this like the weather forecast!
Below 15 = Calm ๐ ยท 15โ25 = Uncertain ๐ ยท Above 30 = Fear mode ๐ฑ ยท Above 40 = Panic ๐จ
๐ S&P 500 / SPY
An index tracking the 500 biggest US companies. It's the most-watched measure of the American stock market. SPY is an ETF that tracks it โ if SPY goes up, America is generally doing well!
When people say "the market was up today" they usually mean the S&P 500 went up.
๐ฑ Yen Rate (FXY)
The exchange rate between US dollars and Japanese yen. This affects the value of Japan ADR stocks you hold in USD. When yen gets stronger vs dollar, your Japan stocks are worth more in USD!
Keiko's advantage: understanding Japan's currency gives you an edge over most US investors!
โ ๏ธ Always Remember
This watchlist is for research only โ not financial advice. Always verify on Yahoo Finance before buying anything. Consult a licensed financial advisor (CFA/CFP) for real investment decisions. Gary & Keiko are learning together just like you!