What Are International and Emerging Markets?
Before you can fully get the most out of your online investment strategies, you need to understand international stocks and emerging markets. The best way to understand them is, of course, to check out the definitions.
International stocks: Shares of companies based in nations in the developed world that have established economies. That includes nations such as the United Kingdom, Japan, France, Germany, Switzerland, Australia, the Netherlands, Spain, Italy, Sweden, Hong Kong, Finland, Belgium, and others.
International stocks are tracked using internationalmarket indexes. Just as the Standard & Poor’s 500 index tracks large U.S. stocks, international market indexes track international stocks.
One of the most popular international market indexes is MSCI EAFE. This index, usually just called the EAFE, tracks stocks of companies from European, Australasian, and Far East markets, hence the name EAFE. MSCI, the provider of the index, offers additional information about the index on its website.
Emerging markets: The up-and-coming nations that are rapidly expanding and experiencing robust economic growth. Generally, investors think of nations such as Brazil, China, Mexico, South America, and Taiwan as examples of emerging markets.
U.S. and international stocks have an index. Guess what? So do emerging markets. One of the most popular indexes of emerging markets stocks is the MSCI Emerging Markets Index. MSCI’s website contains more information about its emerging markets index.
Another emerging markets index that’s closely watched is S&P Dow Jones’ BRIC 40. The S&P BRIC 40 tracks stocks of companies hailing from Brazil, Russia, India, and China. If you’d like to dig more into the S&P BRIC 40, the website allows you to see what stocks are in the S&P BRIC 40 as well as how the index has performed.

Online Investing Glossary
60 percent margin requirement
The requirement that you must put up 60 cents of every $1 you invest.

Online Investing Glossary
annual report to shareholders
A document that contains all the required financial statements and information contained in the 10-Ks presented in a colorful format.

Online Investing Glossary
average daily share volume
The number of shares that usually trade hands in a given day.

Online Investing Glossary
balance sheet
A document that tells you what a company owns and what it owes.

Online Investing Glossary
bond
An IOU issued by a government, a company, or another borrower.

Online Investing Glossary
brokerage
A fee paid to a broker to handle investment transactions for you.

Online Investing Glossary
capital gains
Income you’ve made on the capital you’ve invested.

Online Investing Glossary
cash account
A brokerage account into which you deposit cold hard cash your broker uses to buy stocks for you.

Online Investing Glossary
commission
The price brokers charge for executing trades.

Online Investing Glossary
Consumer Price Index
The measure of how much prices for the things individuals buy are changing.

Online Investing Glossary
days to cover
The number of days it would take, on average, for the number of shares that are being shorted to trade.

Online Investing Glossary
diversifying
To spread your risk over a wide swath of investments.

Online Investing Glossary
dividend yield
The amount of return you’re getting in the form of a dividend, in other words, how big the dividend is relative to what you’ve invested.

Online Investing Glossary
dividends
Cash payments made by companies to their investors.

Online Investing Glossary
earnings reports
A document that tells you how much the company made during the quarter. Earnings reports also contain all the vital financial results for the quarter, including the net income (or total profit) as well as earnings per share, which is how much of the company’s profit you can lay claim to as a shareholder.

Online Investing Glossary
Exchange Traded Funds; ETFs
Groups of stocks, much like mutual funds, that trade like stocks.

Online Investing Glossary
geometric mean
The way to correctly measure stock return.

Online Investing Glossary
holding period
The length of time you hold a stock.

Online Investing Glossary
income statement
A document that outlines how much money a company made.

Online Investing Glossary
limit orders
Trades in which you set the price you’re willing to accept.

Online Investing Glossary
maintenance margin
The percentage of ownership of stocks relative to what has been borrowed (typically 30 percent or higher at most firms) most online brokers require investors to maintain.

Online Investing Glossary
margin account
An account type that lets you borrow money you can use to buy stocks.

Online Investing Glossary
mutual funds
Money collected from many investors and used to invest in a basket of assets.

Online Investing Glossary
number of shares outstanding
The number of shares that are in the hands of investors.

Online Investing Glossary
options
If you own an option, you have the right, but not the obligation, to buy or sell an investment, including shares of stock by a certain preset time in the future.

Online Investing Glossary
penny stocks
Stocks that trade for less than a dollar.

Online Investing Glossary
Producer Price Index
Tracks prices paid by companies that create goods. When prices are rising, both bond and stock investors pay attention because that affects the value of their investments. Stock investors typically don’t like inflation because it drives up costs and makes their investments worth less.

Online Investing Glossary
proxy statement
A document that describes company matters to be discussed and voted on by shareholders at the annual meeting.

Online Investing Glossary
shareholders’ equity
The difference between assets and liabilities is what portion of the company shareholders own, called.

Online Investing Glossary
short squeeze
What happens when the short sellers get nervous that a stock they’re betting against will rise and they rush out and buy the stock back so that they can return it to the brokers they borrowed it from.

Online Investing Glossary
taxable accounts
The standard accounts that come to mind when you think about investing online.

Online Investing Glossary
tax-advantaged accounts
Accounts that are sheltered in some way for some period or other from the Internal Revenue Service.

Online Investing Glossary
total return
The amount a stock has gone up plus its dividend.

Online Investing Glossary
turnover
The amount of buying and selling a fund does.

Online Investing Glossary
valuation ratios
An estimation a stock’s value computed by comparing the stock price with a measure taken from the company’s financial statements.

Online Investing Glossary
volume
A measure of how many times shares of a stock or ETF trade hands.