Price/Earnings

(P/E) Ratio Ratio of market price to a company's earnings per share.

Short Selling

Borrowing a security from a broker and selling it, with the understanding

that it later must be bought back, hopefully at a better price, and returned

to the broker. The major danger in "selling short" is that if

the price of the stock goes up, you will have to pay more than you sold

it for in order to cover your short position.

Split

Issuing additional stock to shareholders. The proportionate equity of

each shareholder remains the same, but the market price per share drops

proportionately.

A company may

declare a split (give shareholders more shares at a lower price) if it

thinks its stock is priced too high to attract investors.

Stock Exchanges

Formal organizations, approved and regulated by the Securities & Exchange

Commission (SEC), to exchange certain common stocks. The two major national

stock exchanges are the New York Stock Exchange (NYSE) and the American

Stock Exchange (ASE or AMEX). There is also the National Association of

Securities Dealers Automated Quotations System (NASDAQ) a computerized

system to facilitate trading by providing brokers/dealers with current

bid and ask price quotes.

Stop Order

An instruction issued to your broker to sell when the price of a stock

has gone down to a specific price. This limits your losses should your

stocks tumble.

Volume

The number of shares traded during a given period. A low volume trading

day can adversely affect the price at which stocks are bought and sold.

If you're thinking

about entering the stock market, consult with a CPA. CPAs are expanding

their practices to include investment advisory services.

The GSCPA is

the premier professional organization for CPAs in Georgia.

With more than

10,000 members, the purpose of the GSCPA is to promote the study of accountancy

and applicable laws, provide continuing professional education, maintain

high ethical and work standards, and provide information about accounting

issues to the membership and the public.

For information

visit www.gscpa.org .

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