Understanding Your Assets
Like cash in a bank account, assets in a brokerage account include a total balance by asset type. The investment assets in your portfolio are known as "holdings," each of which has a unique position on a financial security.
What an Equity Position Includes
The market value of your position reflects the total value of your investment based on most recent share price of that asset.
This is the amount you originally paid for a specific lot of shares, or entire position, which is later used for calculating taxes on gains.
Long Versus Short
Though not advisable for beginner investors, you may take a "short" position in a stock, which gains when its price goes down.
Your shares are organized by lot, or group of shares purchased together, which is important for taxes as you buy and sell over time.
Gains and Losses
The difference in share price for sold shares is reflected as a "realized" gain or loss while the equivalent for unsold shares are unrealized.
The Types of Investment Return
When the price of your shares rises above the price that you purchased, it becomes an unrealized gain and income, once you sell.
Some stocks offer dividends to shareholders, typically paid out quarterly for each share you own, and either in cash or more stock.
Similar to the interest you can earn on a savings account, bondholders receive interest in the form of "coupon" payments.
It's your job to monitor holdings to ensure that they are adhering to your investments objectives related to risk and expected return.
While performance varies considerably by sector and economic phase, returns of 8 to 10% per year are historically common for stocks and the yields of investment-grade bonds often range between 2% to 4%.
What Makes Stock Prices Move
The announcement of a new product line, change in corporate management or pending lawsuit all impact public outlook on the stock.
When company financials are shared quarterly, stock prices react sensitively to deviations between analyst forecasts and actual figures.
Analysts maintain ratings toward publicly-traded stocks and may upgrade or downgrade their outlook, moves that can affect share price.
What Else Can Affect Stocks
Industries heavily-reliant on certain economic factors, like the price of crude oil for auto companies, see their stocks greatly impacted.
"Bear markets" with low consumer spending make it hard for even strong companies to grow, thus constraining their equity potential.
Don't sell just because the market dislikes it today