14 min read

Glossary of share market terms: How to speak shares

You might be a seasoned share market investor like Warren Buffet, or an everyday Kiwi investing with KiwiSaver. Whatever your level of share market smarts, you’re probably reading this to increase your investing knowledge, so welcome! In this glossary, we cover the basic terms in simple language.
Risk, returns & timeframes illustration
September 7, 2023

We acknowledge and thank the FMA, Dr Karena Kelly and Brook Taurua Grant, the RBNZ and the Māori Dictionary for their research which helped us with te Reo Māori kupu for this glossary.



An active investment strategy is when investment teams or individual experts try to beat an index using their knowledge of companies and the share markets. They combine in-depth research, market forecasting and combined years of experience to make decisions. Investors may pay additional fees for their expertise and their frequent trading. Fans of active investing believe they've picked a smart investment management company that’s capable of getting slightly higher results than an index. They also may feel that when the share markets dip, active management may limit the impacts thanks to active decision making by real people, as opposed to passive funds that simply track the market down.

American Depositary Receipt (ADR)

Some stock symbols (aka tickers) are followed by a dash and ‘ADR’, which indicates the stocks are American Depositary Receipts (ADRs). An ADR is a certificate issued by a US depositary bank and is generated when the bank buys shares in a company that’s listed on a non-US share market and repackages them for investors to buy on to list on the US market. Each ADR share represents a specific number of shares in a company. Learn more about ADRs.

Asset & asset classes

Rawa or rironga & momo rawa

An asset is defined as anything that holds monetary value. Anything owned by you or owed to you - your car, your mobile phone, the $20 you loaned Rachel - is an asset. An asset class is a group of investments that share similar properties, behaviours and regulatory requirements. Stocks, real estate, cash and cryptocurrency are types of asset class. Investing in multiple asset classes is a common way for investors to diversify their portfolio.


Bonds are a type of asset class. A bond is a loan to a borrower that pays investors a specific percentage return over a specific set time frame. When you buy bonds, you are essentially loaning your money to a government or company - a bond issuer - for a specific amount of time that they will use for a specific purpose. Learn more about bonds.

Buy and hold

Karioi (long term)

Buy and hold is a ‘lazy smart’ approach to investing. The definition is in the name; you buy shares and hold (own) them for the long term. A buy and hold strategy gives you the ability to get on with your life while your money works hard for you and potentially benefits from the magic of compounding growth.

Class A, Class B, Class C & dual-class companies

A company is able to create two classes of shares that allow different voting rights among their shareholders. These dual-class companies typically have Class A and Class B shares. For example, Berkshire Hathaway’s stock structure is to have Class A (BRK.A) shares, that cost around US$500,000 (at the time of writing) and Class B shares (BRK.B) - the ‘Baby Berkshires’ - that cost around US$300. The Class B shares are aimed to be more accessible for investors who want to own whole shares rather than fractional shares. Investors who own Class B shares may not get voting rights, but they do receive dividends. Learn more about Class A, Class B and dual-class companies.



A company is a legal entity formed to operate a business (like Hatch). Because companies can be worth a lot of money (think billions), their ownership is broken into shares. When a company goes public, their shares become available for everyday investors to buy and sell through the share markets.

There are two ways to invest in a company through the share markets:

  • Choose a company to invest in and buy shares in it. With Hatch, this will give you all the shareholder benefits of direct ownership.
  • Invest in an exchange traded fund (ETF) to spread your money across multiple companies (or other investments) at once. This is called instant diversification.

Compounding growth

Tipu or tupu

Often referred to in investing circles as the eighth wonder of the world. Compounding growth is where you earn returns on your returns, aka interest on your interest. This can create a snowball effect, rolling through the years, potentially picking up returns on returns. Learn about compounding growth.

With Hatch, you can become a shareholder in over 4,700 different companies and over 1,200 ETFs.

Day trading


Day trading is the act of buying and selling shares frequently. While some professionals have experience in day trading, the term day trading can also refer to retail investors who buy shares in companies to sell them quickly for what they hope is a profit. The problem is, 99% of them tend to wind up worse off than those who invest for the long term.


Whakakanorautanga or whakakanorau

Diversification means spreading your money over many baskets of investments to limit the impact of any one of them failing. In other words, potentially to lower the risks of investing. You can achieve this through the share markets by buying shares in many companies or an exchange traded fund (ETF) or two.

While the companies listed on the US share markets are usually billion-dollar behemoths, there is always a chance they may fail. But the chances of all of them failing at once may be unlikely. If you haven’t looked into them yet, ETFs can be a way investors can diversify.


Hua tūtanga pakihi or moni whiwhi or moni hua

Profitable companies can decide to share their profits with shareholders and pay them out in a dividend. If you invest in companies that pay dividends, dividends will be paid into your Hatch account in USD, ready to re-invest. Learn more about dividends.

Dollar-cost averaging

Dollar-cost averaging is an investment strategy that can help lower the amount you pay for your investments and manage risk when you’re buying shares in a company or exchange-traded fund (ETF). In simple terms, dollar-cost averaging is when you invest the same amount of money in a company or fund at regular intervals over a period of time. This strategy takes the guesswork out of monitoring daily share prices to calculate the best time to buy and the amount to pay. Learn more about dollar-cost averaging.

Earnings per share (EPS)

Moni mo ia hea

EPS is calculated by dividing a company’s earnings by the number of common shares available to trade. A high EPS can indicate greater profitability and income to support the company’s future growth. However, some companies reinvest earnings straight back into the business, while others might pay out those earnings as dividends. A low EPS may mean a company is less likely to give shareholders a slice of the profits as dividends.

Exchange traded Fund (ETF)

Tahua or tahua taurima

An exchange traded fund (ETF) is a pre-filled basket with a variety of investments in it, such as companies, gold, bonds and property. As with KiwiSaver, your money gets spread across a bunch of investments in a single purchase. Because they deliver diversification, ETFs have been a popular method of investing.

An ETF that follows an index on Hatch is the S&P 500, which is a basket of the 500 largest companies on the US share markets. Investing in one of the S&P 500 ETFs means you spread your money across some of the world’s most recognisable brands. The S&P 500 has returned a historical average of 10% per year.

Fractional Shares


A fraction of a share is a portion of a full share of a company or ETF (exchange-traded fund). Fractional investing means you can buy portions of shares instead of buying a whole share. With fractional shares, you can invest as little as you like, regardless of the price of one share - which can cost as much as US$500,000! Owning fractional shares means you won’t have voting rights that come with owning a full share, but you’ll still receive dividends. Learn more about fractional shares.

Holding, or shareholding


The total number of shares you own in one company or ETF is referred to as a shareholding or holding. It’s also sometimes referred to as ‘owning stock in a company’. An easy way to remember this word is that when you own shares, you hold onto them, aka shareholding. And someone with a shareholding is known as a shareholder. Your combined shareholdings, which is all the shares you own, is your portfolio.



An index is a categorised list of investment options, like 'the largest 500 companies on the US share markets', or 'the 10 companies with the highest dividends on the NZX'. These lists are created and managed by companies like Standard and Poor's (S&P) and are often used by investment managers as a benchmark to compare their performance.

Index Fund

Tahua or tahua taurima

These are passive funds (including ETFs) that aim to track or mimic an index. Companies like Vanguard and Blackrock have created ETFs that both track the same S&P 500 index.

Market capitalisation (market cap)

A company’s market cap is their total dollar market value or their worth as determined by the share market and investment professionals. A company’s share price and how many outstanding shares dictates their current value: Share price x number of shares = market cap (value of the company).

Money market fund

Tahua or tahua taurima

A money market fund is a type of mutual fund that spreads money across lower-risk investments, such as cash, or cash equivalent securities, certificates of deposit, or US Treasury securities. These funds are managed by fund managers and backed by investment fund companies with the goal of keeping the value of the money stable. Learn more about money market funds.


The Nasdaq is a US share market that formed in 1971 and has been entirely electronic from day one. Most tech companies, including Apple, Facebook, Microsoft, Amazon, Google, Tesla and NVIDIA, are listed on the Nasdaq.

Like the NYSE, the Nasdaq is a public company (Nasdaq OMX Group, Inc. - NDAQ) that you can buy and sell shares in with Hatch (yep, super meta!).

Hatch gives you access to both the NYSE and Nasdaq, and there’s no difference in how you buy and sell shares in either of them. Learn more about the Nasdaq and the Nasdaq index.


The New York Stock Exchange (NYSE) dates back to 1792. A common nickname for the NYSE is the Big Board, and ‘big’ may be an understatement. The NYSE is the world’s largest share market, and the total value of the companies listed on it is higher than the Nasdaq, Tokyo and London share markets combined. The story of the NYSE is almost the Westernised story of America, which may make for a lively nighttime read!

It may surprise you to learn that, like the Nasdaq, the NYSE is owned by a public company (Intercontinental Exchange Inc - ICE) that you can buy and sell shares in with Hatch. Yes, you can buy shares in an entire share market through that share market #Meta.

Hatch gives you access to companies listed on the NYSE and Nasdaq, and there’s no difference in how you buy and sell shares in either of them.



A passive investment strategy means the investment team isn't making active investment decisions to try to beat an index; instead they spend their time replicating an index. Because there's no human expertise involved, passive ETFs usually have lower fees. Fans of passive investing point to evidence that in the long run, it's unusual for an actively managed fund to beat the index, and they prefer the low fees.

Price-to-Earnings (p/e) ratio

The p/e ratio is a metric that compares the share price to the earnings per share. The p/e ratio can be particularly useful when combined with other metrics for comparing similar companies working within the same industries, or the same company’s performance over a specific period of time. Like all metrics, p/e ratio is only useful when you use it within a wider context alongside other types of analysis.

Primary market

Maakete tuatahi

When a company goes public, they list their shares on the primary market where institutional investors (big dogs like hedge funds, major banks, the mega-wealthy, and since 2021, Hatch) investors can buy them during an IPO period.

After a company goes public, anyone can buy and sell shares through the secondary market, also known as a share market or stock exchange, like the Nasdaq and the NYSE.


Huinga haumitanga

A portfolio is a fancy name for all the investments (holdings) you own. Your share portfolio includes all the companies and exchange traded funds (ETFs) that you have money invested in.

Quarter & Fiscal Quarters

Hauwhā, or hau whā

A quarter is three months in a company’s calendar that measures one-quarter of the financial year. Companies listed on the share markets are required to prepare quarterly earnings reports. Quarters are numbered Q1, Q2, Q3 and Q4, often with the year, eg. Q1 2023. The fiscal year runs from 1 January to 31 December, and fiscal quarters measure Q1 Jan-Mar, Q2 Apr-Jun, Q3 Jul-Sept, Q4 Oct-Dec. Not all companies operate on the fiscal year.

Recession NZ

Timunga taiōhanga Aotearoa

A recession in New Zealand - also called a ‘technical recession’ - is two or more consecutive quarters of significant negative or slowing economic activity as indicated by gross domestic product (GDP). This indicator typically refers to the production approach to GDP, which tallies the value of the goods and services produced in New Zealand. Changes in GDP reveal insights about the general health of the country’s economy. Recession is a normal part of the economic cycle, which fluctuates between expansion (growth) and contraction (recession) and can occur every 5-10 years. Learn more about recession.

Recession US

Timunga taiōhanga Te Hononga o Amerika, Te Unaititi Teiti, Ngā Whenua Tōpū o Amerika

A recession in the US uses more complex formulas. Like New Zealand, a US recession is a significant downturn in economic activity over two or more consecutive quarters of negative gross domestic product (GDP). GDP also works in combination with other indicators, which may include nonfarm payrolls, industrial production, and retail sales.


Real Estate Investment Trusts known as REITs are similar to ETFs and enable investors to invest in property through a company (REIT) that finances, owns, or operates real estate that generates income (without the hassles that come with being a landlord!). REITs can include cell towers, data centres, commercial and residential property like warehouses, retail centres and malls. 

REITs have highly specific rules for how they operate, and in the US that means REITs must pass on 90% of their profits as dividends. This means REITs may suit investors seeking to generate income while they hold shares over the long term. Historically, REITs have been one of the top asset classes in times of high inflation because over time, rents typically rise to help offset this increase. The world’s largest REIT is ProLogis, providers of warehouses for companies that need shedloads of floor space, like Amazon, Walmart and DHL.

Retail investor, or everyday investor

Kaiwhakarato moni or kaituku moni

Retail investors are people just like you who are putting their money to work in the share markets.

Up until the invention of the internet, the share markets were the exclusive domain of the financial elite. Advances in technology over the last decade - and really only the past five years - have enabled investing platforms like Hatch to make investing in shares straightforward, accessible and affordable for anyone with internet access.

Between 2019 and 2021, more than 10% of Kiwis started investing shares for the first time. This rise of the retail investor revolution that democratises investing access, gained a fair bit of media interest. Here’s a sample:


Paremata or hua or hua ahumoni or tōpūtanga hua more

A return is the money made on your investments over time. With shares, you can make returns in two ways:

Through the potential of compounding growth - which works over time - investors who own shares in companies and exchange traded funds (ETFs) for many years or decades may expect to see the amount their investments grow in value over time.



The word ‘risk’ typically has negative connotations with investing. Risk refers to the chance your investments might fluctuate, that is go up and down in value. Also known as share price volatility, which is the short-term up and down movement based on statistics of prices in the share market. Volatility in the share markets is considered ‘normal’ and is something investors need to manage by understanding their feelings and emotions around risk and volatility. High market volatility may seem scary for investors, but is something to be aware of rather than afraid of.


Pūtea penapena

Savings are typically money set aside after bills and spending needs are met, which is typically stored in a bank account, ideally to earn interest but with ‘minimal returns’. Savings are considered one of the lowest risk places to store your money. But the low risk may also mean low reward.



The legal definition varies between countries, but broadly speaking, a security is a tradable financial asset that holds value, like stocks, bonds or options.


Tūtanga pakihi or hea

A share usually refers to a single unit of ownership in a company or exchange-traded fund (ETF). Think of the total value of a company as a pie, and each share is a slice of that pie.

Because companies often have high price tags (many on the US share markets are valued at over $1 billion), one person rarely owns the whole thing. So they are broken up into shares allowing thousands of investors to have a slice each: Share price x number of shares = value of the company

While some companies are privately held, owned by founders, financial backers and employees, once a company goes public, anyone can buy and sell their shares in the company through the share markets.

Shares are not the same as stocks, even though many people use these terms interchangeably. It doesn’t matter if you confuse the two; the difference is small and has no impact on your ability to invest.


Whaipānga or kaipupuri hea

Shareholders are people like you (and some organisations) who own shares in a company or exchange traded fund (ETF). When you’re a shareholder, you’re a part-owner of a company or ETF, meaning you have a shareholding. You can become a shareholder with Hatch, and learn how to grow your investing confidence.

Becoming a shareholder through share ownership may give you the potential to earn money from your investments over a long period of time. But before you decide whether you want to invest your hard-earned money in shares, doing your research and taking our free Getting Started Course may help you understand what it all means

Shareholding, or holding


The total number of shares you own in one company or ETF is referred to as a shareholding or holding. It’s also sometimes referred to as ‘owning stock in a company’. An easy way to remember this word is that when you own shares, you hold onto them, aka shareholding. And someone with a shareholding is known as a shareholder. Your combined shareholdings, which is all the shares you own, is your portfolio.

Shareholder benefits

The main reason people own shares is the potential that as the company grows their share values grow alongside them. If you own shares in a company or ETF that pays their shareholders dividends, you may also receive regular cash payments into your Hatch account as the company shares their profits with their owners.

On top of the bragging rights that come with being a shareholder, you can also hold power. With Hatch, you own your shares directly, which may be important to you. Being a direct owner means you get invited to attend annual shareholder meetings, vote on their future decisions and leadership, and potentially influence how a company you own shares in is run.

Some companies have additional benefits for shareholders - the perks of being an owner.

Share market, or Stock exchange

Maakete tūtanga pakihi or hea

After a company has gone public through a primary market, their shares are listed on a secondary market, commonly referred to as a share market or stock exchange.

A share market is simply a place where shares in companies and ETFs are bought and sold. While ‘share market’ and ‘stock exchange’ may seem very different terms for the same thing:

  1. Share market: A market to buy and sell shares
  2. Stock exchange: A place to exchange (buy and sell) shares in stocks

Similar to Trade Me, they are just marketplaces. But instead of buying and selling products and services, everyday investors buy and sell shares in the companies that create them. Since their inception in the early ‘90s exchange traded funds (ETFs) have made it possible for investors to buy a basket of investments in one purchase, providing an alternative to choosing individual stocks for your portfolio.

There are 60 share markets across the world, including the NZX here in New Zealand. The world’s largest and most popular share markets are located in the USA, called the NYSE and the Nasdaq. Many of the brands you see everyday with are likely listed on these US share markets.

Share price

Utu hoko tūtanga pakihi or hea

The share price is the price you pay for one share (aka one unit of a company’s stock or ETF). A company’s share price can go up and down depending on many things, from the loss of key staff members to a company being the first to fly to space.

To calculate the market cap (or total value) of a company, use this equation:

Share price x number of shares = value of the company

It’s important to note that it’s almost impossible to decide which company is a ‘better’ investment by comparing two companies’ share prices. While it may intuitively feel like the right thing to do, it’s worth learning more about how share prices are calculated.


Despite how they are used in everyday conversation, a stock is not the same as a share. A stock represents ownership in a company as a whole (‘I own a company’s stock’), whereas a share is a unit of a stock (‘I own five shares in a company’s stock’). Does the difference matter? We don’t think so.

Stock symbols, stock tickers

A stock symbol or ticker is a series of one to five letters, or an abbreviation, that represents a company or ETF’s stock listed on a share market. They were created in the 1800s to make trading more efficient around time of using ticker tape machines (which were based on a ‘tick’ that shows movement of shares prices going up or down). Some tickers are quirky and inventive, such as: Petco’s Health and Wellness Company’s WOOF , Harley-Davidson’s HOG, Cheesecake Factory CAKE, Dave & Buster's Entertainment’s PLAY, Gorilla Technology Group’s GRRR, Pacer US Small Cap Cash Cows CALF, and Olympic Steel’s ZEUS. Learn more about stock tickers.

Trade, or order


When you trade shares, it’s a similar process to trading goods and services through sites like Trade Me. A trade is when an investor sells shares to another investor through a share market. The term ‘trading’ has become loaded over the years and can be associated with buying and selling shares at speed (known as day trading). Because Hatch’s aim is to help Kiwi people work towards understanding share markets, you’ll hear us use the word ‘order’ rather than ‘trade’.

With Hatch, you can place four types of orders. Many investors simply stick with market orders, and depending on your own financial goals you may or may not not choose to use all types of orders.

  • Market order This is the most straightforward way to buy and sell shares. Market orders are named because just like in a market, you're buying and selling shares in real-time (or when the markets next open).
  • Auto-invest Auto-investing can take some of the admin out of building your portfolio. With Hatch, you can auto-invest into as many companies and exchange traded funds (ETFs) as you like. For example, if you want to invest $300 a month every month into the same company or ETFs you can set up an auto-investment. A market order will be placed on your behalf at the frequency you choose, such as ‘the 21st of every month’ or every fortnight, month, quarter, etc.
  • Limit order Limit orders can give investors more control over the price shares are bought and sold for, and are primarily used to attempt to buy or sell shares at a better price. You enter the exact number of shares you want and the price you want to buy or sell them for. If the share price doesn’t reach your target price, your order will not be completed and you won’t buy or sell the shares.
  • Stop-loss orders and stop-buy orders. Investors use stop-loss orders similarly as they would an insurance policy aiming to try and stop or reduce losses, and to control risk. Stop-loss orders give instructions to sell shares if they drop in value to a certain price, known as the stop price.
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We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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