Glossary of terms used on this site

S&P 500, or just the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices, and many consider it to be one of the best representations of the U.S. stock market. The average annual total return of the index, including dividends, since inception in 1926 has been 9.8%; however, there were several years where the index declined over 30%. The index has posted annual increases 70% of the time.

The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued. The national exchanges, such as the New York Stock Exchange (NYSE) and the NASDAQ, are secondary markets.

A shareholder, also referred to as a stockholder, is a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success. These rewards come in the form of increased stock valuations, or as financial profits distributed as dividends. Conversely, when a company loses money, the share price invariably drops, which can cause shareholders to lose money, or suffer declines in their portfolios’ values.

If you’re retired or disabled, Social Security is a government safety net that can provide you with some income. The program is based on the idea that government is responsible for the social welfare of its citizens. Whether you agree with this notion or not, part of your paycheck goes to Social Security, and when you retire, you receive money from the program.

Sovereign default is a failure in the repayment of a county's government debts. Countries are often hesitant to default on their debts, since doing so will make borrowing funds in the future difficult and expensive. However, sovereign countries are not subject to normal bankruptcy laws and have the potential to escape responsibility for debts without legal consequences.

A startup or start up is a company or project initiated by an entrepreneur to seek, effectively develop, and validate a scalable business model. Hence, the concepts of startups and entrepreneurship are similar. However, entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to grow big or become registered, while startups refer to the new businesses that intend to grow beyond the solo founder, have employees, and intend to grow large. Start ups face high uncertainty and do have high rates of failure, but the minority that go on to be successful companies have the potential to become large and influential. Some startups become unicorns, i.e. privately held startup companies valued at over US$1 billion.

Shares of ownership in a company. When a company goes public, it issues shares of stock to the public (see also initial public offering). Many, but not all, stocks pay dividends — a distribution of a portion of the com- pany’s profits. In addition to dividends, you make money investing in stock via appreciation in the price of the stock, which normally results from growth in revenues and corporate profits. You can invest in stock by purchasing indi- vidual shares or by investing in a stock mutual fund that offers a diversified package of stocks.

The stock market refers to the collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Such financial activities are conducted through institutionalized formal exchanges or over-the-counter (OTC) marketplaces which operate under a defined set of regulations. There can be multiple stock trading venues in a country or a region which allow transactions in stocks and other forms of securities.

A stock market crash is a rapid and often unanticipated drop in stock prices. A stock market crash can be a side effect of major catastrophic events, economic crisis or the collapse of a long-term speculative bubble. Reactionary public panic about a stock market crash can also be a major contributor to it.

The STOXX Europe 600, also called STOXX 600, SXXP, is a stock index of European stocks designed by STOXX Ltd.. This index has a fixed number of 600 components representing large, mid and small capitalization companies among 17 European countries, covering approximately 90% of the free-float market capitalization of the European stock market (not limited to the Eurozone). The countries that make up the index are the United Kingdom (comprising around 27% of the index) France, Germany and Switzerland (accounting for around 15% of the index each), as well as Austria, Belgium, Denmark, Finland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, and Sweden.