Glossary

Investment Club Terms

Investment Club

An investment club is a group of people who run a stock portfolio together, trading investments as a group. People love investment clubs because they have tons of benefits in addition to being social, educational, and fun!

Club manager

Each club has a club manager who acts as the main point of contact between Voleo and investment clubs. This role can be given to another club member at any time.

Proposal Majority

The Proposal Majority is the minimum number/percentage of club members who must vote in favor of a trade proposal. Voleo’s default setting requires at least 51% of voters to approve a trade proposal.

Quorum

The Quorum is the minimum number of club members who must participate on a trade proposal in order for the trade to be successful. Voleo’s default setting requires at least 2 members to vote on each trade proposal, but this number grows as your club grows.

Mark to market value

Mark to Market Value refers to the fair value of your portfolio at a specific time. This number is important for investment clubs because the value of your club will change over time.

Club motions

Club Motions refer to changes that are requested in your club’s partnership agreement. For club motions to be approved, a super majority of 66% must vote “yes”.

Social trading app

A social trading app is a social environment that offers interaction between investors in the stock market. These apps provide significant benefits such as sharing knowledge amongst users and supporting your club needs, i.e., creating a club, inviting friends, executing trades and monitoring your portfolio performance.

Voleo

Voleo is a portmanteau of the words ‘voting’ and ‘portfolio’. Voleo is an app that helps people form digital investment clubs. Together, users can trade securities with people they trust, and make more informed investment decisions.

Basic Investing Terms

Asset allocation

Asset allocation describes the approach to managing your investment portfolio wherein you allocate your money into different types of investments, balancing risk versus reward, to reduce your risk.

Minimum payment

A minimum payment is the minimum amount you have to pay on your debts per month to remain in good standing with the company that lent you money. Making your monthly minimum payment on time is the least you have to do to avoid late fees and to have good repayment history on your credit report. The amount of the payment is calculated as a percentage of the total debt.

Robo-advisor

Robo-advisors are a type of financial advisor that offer financial advice and investment management online, typically with no human interaction. The direction they offer is based on mathematical rules and algorithms, and these algorithms automatically allocate, manage and optimize a client’s portfolio.

Exchange-traded fund (ETF)

An exchange-traded fund (ETF) is a type of fund that can be invested in much like an individual stock. When defining an ETF, often a mutual fund is used to draw comparisons because the two are very similar: both investments bundle together assets to offer a diversified portfolio. ETFs tend to represent indexes as the funds own a group of assets in the same sector (i.e., stocks, commodities, bonds etc.) much like an index fund. Like owning a stock, with ETFs you own a share of the actual fund and trade the security on the stock market.

Index fund

An index fund is a mutual fund that allows an individual to invest in an index such as the S&P 500. Index funds are designed to give investors returns that are in line with an index of a market segment, such as a real estate investment fund, or of the entire market (such as the S&P 500).

Mutual fund

A mutual fund is something you can invest in that enables investors to pool their money together into one professionally managed investment. The fund itself holds the individual stocks, bonds, cash or a combination of those assets, which all combine to form the mutual fund.

Rebalancing

Rebalancing is a process in which you realign the weightings of your portfolio. Rebalancing involves buying/selling assets in a portfolio, when necessary, to maintain your original desired level of asset allocation. If stocks outperform bonds, your portfolio that was once a 50/50 split between stocks and bonds will now have a higher percentage of stocks - rebalancing in this case would involve selling some of your stocks and reinvesting that money in bonds.

Bond

A bond is like a tradable loan. When you buy a bond, you are usually agreeing to borrow money from a government or a company. Typically, the group who issues the bond repays bond issuer promises to repay the entire principal loan amount on a future day, known as the maturity date, and pay interest income in the meantime based upon a coupon rate.

Real estate investment trust (REIT)

Real estate investment trusts (REITs) are a way to invest in real estate without the need to buy or maintain actual buildings or land. They trade like stocks except they have special tax treatment.

Short selling

Shorting is done when an investor thinks a stock is going to decrease in value. An investor borrows shares of stock or another asset they don’t own and sells it with the promise to replace the asset at a later date. If the stock decreases in value the investor repurchases the stock at a lower price and his profit is the difference in price.

Market Capitalization

Market cap is the value of all outstanding shares of a company's stock at the current stock price.

Income Statement

An income statement shows a company's revenues, expenses, taxes, and net income.

Balance Sheet

A balance sheet shows a company's assets, liabilities, and shareholders' equity.

Stock Exchange

A stock exchange is an institution, organization, or association that hosts a market for buyers and sellers of equities to come together during normal business hours and trade with one another.  

Volatility

Volatility refers to the degree to which a stock or other investment security fluctuates in price.

Dividend Yield

This is the yield of a common stock at its dividend rate. If a stock is trading at $50 per share and pays out $5 in annual dividends, the dividend yield would be 10%.