Investing terms can often feel confusing, especially for beginners. This glossary is designed to give you clear, simple definitions of the most important concepts in fundamental investing so you can understand how markets work and make better financial decisions.
Fundamental investing focuses on analyzing businesses based on their financial performance, competitive advantage, and long-term value. To do that effectively, you need to understand the language investors use—from basic terms like assets and cash flow to more advanced concepts like return on invested capital (ROIC) and discounted cash flow (DCF).
In this investing glossary, each term is explained in plain language with a focus on real-world understanding—not technical jargon. Whenever possible, definitions are connected to broader investing concepts so you can see how each idea fits into the bigger picture.
You’ll learn key terms related to:
Financial statements and accounting concepts
Business analysis and valuation methods
Stock market fundamentals and investment strategies
Risk, return, and long-term decision-making
If you’re just getting started, this glossary is the perfect place to build your foundation. If you’re already learning, it will help reinforce and clarify the concepts that matter most.
Start with our complete guide: What Is Fundamental Investing
Then explore deeper topics in Investing Basics and Business Analysis
Yield to maturity (YTM) is the estimated annualized return an investor can earn by buying a bond at its current market price and holding it until maturity, assuming the issuer makes all scheduled coupon and principal payments and the bond is not called or otherwise redeemed early. In bond investing, yield to maturity is one
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Face value is the stated amount assigned to a security by its issuer. For bonds, face value is the principal amount the issuer generally agrees to repay at maturity and the amount used to calculate coupon payments. In bond investing, face value and par value usually mean the same thing. A bond may have a
Par value is the stated or face value assigned to a security by its issuer. For bonds, par value is the principal amount the issuer generally promises to repay at maturity and the amount used to calculate coupon payments. In bond investing, par value is commonly called face value. A bond may have a par
The coupon rate is the annual interest rate a bond pays based on its face value, also called par value. For most traditional fixed-rate bonds, the coupon rate is established when the bond is issued and remains unchanged until maturity. The bond’s market price and yield can change, but the contractual coupon rate usually stays
The Treasury yield curve is a line that shows the yields of U.S. Treasury securities across different maturities at a specific point in time. In investing, the Treasury yield curve helps investors compare short-term and long-term interest rates. Its shape can provide information about market expectations for inflation, economic growth, monetary policy, and future interest
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A Treasury note, commonly called a T-note, is a medium-term debt security issued by the U.S. Department of the Treasury that generally has an original maturity of more than one year and up to 10 years. Treasury notes typically pay a fixed rate of interest, known as the coupon rate, every six months and repay
A Treasury bill, commonly called a T-bill, is a short-term debt security issued by the U.S. Department of the Treasury that typically matures in one year or less. Unlike traditional Treasury notes and Treasury bonds, Treasury bills generally do not make periodic coupon payments. Instead, they are typically sold at a discount to their face
A Treasury bond is a long-term debt security issued by the U.S. Department of the Treasury to help finance the federal government. Treasury bonds typically have original maturities of more than 10 years and pay fixed interest, known as the coupon, at regular intervals until maturity. At maturity, the investor receives the bond’s face value,
Current portion of long-term debt is the amount of a company’s long-term borrowing that is scheduled to be repaid within the next 12 months and is therefore reclassified as a current liability on the balance sheet. In fundamental investing, the current portion of long-term debt matters because it reveals how much previously long-term borrowing has
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Long-term debt is interest-bearing borrowing that a company is generally not required to repay within the next 12 months. In fundamental investing, long-term debt matters because it represents a major claim on a company’s future cash flow. Debt can help finance acquisitions, expansion, capital expenditures, and other investments, but excessive long-term debt can increase interest
