Bear market, “Bearish” Pessimistic market sentiment, characterised by falling share prices. Bear markets often predict an economic downturn. Benchmark A standard against which performance can be measured, usually an index that averages the performance of companies in a stock market or segment of the market. Bull market, “Bullish” Optimistic market sentiment, characterised by rising share prices and investor confidence on the expectation that strong returns will continue. Dividend reinvestment plan (DRP) The opportunity for shareholders to invest all or part of their dividend in new shares in a company. By participating in a DRP, shareholders will receive shares instead of a cash dividend without paying any brokerage fees. Shares can be offered at a discount to the current market price of the company. Dividend yield The annual dividend amount expressed as a percentage of the share price at a certain point in time. This is calculated as follows: Annual dividend amount per share ÷ share price Ex/cum dividend Shares trade cum dividend when the dividend of a company is announced, but not yet paid. If you purchase shares during this period, you will be entitled to receive the dividend. If you purchase shares on or after the ex-dividend date, the previous owner of the shares is entitled to the dividend. A company’s share price usually falls on the exdividend date by an amount equal to or near the dividend. Key investment terms
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