Glossary: the stock market, in plain language

The basics

Stock: a small part of a company. If the company is worth more, so is your part.

ETF: an exchange-traded fund that groups many assets into one; by buying it, you diversify at once.

Index: a market thermometer (like the S&P 500 or the IBEX 35) that aggregates the biggest companies in a market.

Dividend: the part of the profit a company distributes to its shareholders, usually every quarter or year.

Market capitalisation: what a company is worth on the market: share price × number of shares.

For analysis

P/E: how many times you pay the company's annual profit when buying the share. A high P/E usually signals high expectations (or an expensive price).

Price target: the value an analyst believes the share will reach within a time frame. How to interpret it.

Consensus: the aggregated view of several analysts on an asset: how many see it rising or falling.

Volatility: how much and how sharply a price moves. More volatility = more risk (and more chance of scares).

Fundamental analysis: studying the business (revenue, debt, sector) to estimate what it is worth. Technical analysis: studying the price chart to sense where it may go.

Growth stock: a company that reinvests everything to grow fast; usually more volatile. Defensive stock: a stable business that holds up better in crises (consumer staples, healthcare, utilities).

The GrandAlpha vocabulary

Sealed prediction: a thesis recorded immutably with asset, direction, entry price, target and time frame. Not even its author can edit it. How it works.

GrandAlpha Score: a 300-to-900 number that sums up an analyst's verifiable track record: accuracy, difficulty, calibration and consistency. Methodology.

Conviction: the confidence (50–90%) an analyst declares in their prediction. Failing with high conviction penalises more.

Conflict of interest: the mandatory, public declaration of whether the analyst holds a position in the asset they predict.

Watchlist: your list of watched assets, with real price and active predictions.

For trading (outside GrandAlpha)

Broker: the regulated intermediary with which you actually buy and sell. GrandAlpha is not one: here you analyse, you do not trade.

Diversification: not concentrating everything in one asset or sector; the simplest way to reduce risk.

Long term: a horizon of years, not weeks. Time smooths the noise, though it does not remove the risk.

Past performance: what already happened. It does not guarantee future results — and every decision should remember that.