Basics

When a company offers its shares on a stock exchange for the first time. IPO shares can be purchased at the offering price and are popular because they often rise on the first day of trading. However, price increases are not guaranteed.

A private pension system where you contribute and manage your own funds. It offers tax benefits including full income deduction for contributions and tax-free investment gains. However, withdrawals are generally not allowed until age 60.

Revenue earned simply by holding stocks. The most common example is dividends, where a portion of the company's profits is distributed to shareholders. It is an important source of returns in stock investing alongside capital gains.

A mutual fund that aims to replicate the performance of a market index such as the Nikkei 225 or TOPIX. With low management costs and broad market diversification, it is considered the standard approach for long-term investing.

A mutual fund listed on a stock exchange that can be traded in real-time like stocks. Many track indices such as the Nikkei 225 or S&P 500, and are popular products that enable low-cost diversified investing.

The date when stocks and payment are actually exchanged after a trade is executed. In Japan, the settlement date is 2 business days after the execution date (T+2). This also relates to acquiring rights for dividends and shareholder benefits.

Securities issued by companies to raise capital. When you purchase stocks, you become one of the owners (shareholders) of that company. Shareholders have the right to receive dividends and exercise voting rights at shareholder meetings.

The highest decision-making body of a corporation, held at least once a year, where shareholders can participate. It resolves important matters such as appointing directors, determining dividends, and amending articles of incorporation. Shareholders have voting rights proportional to their shares.

A system where companies provide shareholders with products, services, or discount coupons. Not all companies offer this program, and you need to hold shares on the record date. It is a uniquely Japanese system popular among individual investors.

A technique of borrowing and selling shares you don't own, expecting a price decline, then buying them back at a lower price to return and profit. A type of margin trading where you profit when prices fall, but lose when they rise.

The profit earned from selling stocks at a higher price than the purchase price. For example, if you buy a stock at 1,000 yen and sell it at 1,500 yen, the capital gain is 500 yen. It is one of the primary sources of profit in stock investing.

An account opened at a brokerage firm to buy and sell financial products such as stocks and mutual funds. It needs to be opened separately from a bank account, and some online brokers allow same-day account opening.

A marketplace where securities such as stocks are bought and sold. In Japan, the Tokyo Stock Exchange (TSE) is the largest, with additional exchanges in Nagoya, Sapporo, and Fukuoka. Exchanges set trading rules and monitor fair trading.

A trading method where you borrow money or stocks from a brokerage to trade. You can trade up to about 3.3 times your own funds, allowing for larger profits, but also carrying the risk of larger losses. Not recommended for beginners.

The total value calculated by multiplying the stock price by the number of outstanding shares, representing the company's market valuation. Companies with large market cap are called "large-cap stocks" and smaller ones "small-cap stocks." It is an important indicator for comparing company sizes.

When a company's shares become available for trading on a stock exchange. Once listed, general investors can freely buy and sell the company's shares. Listing requires meeting the exchange's strict screening criteria.

A medium-term trading strategy where stocks are bought and sold over a period of several days to several weeks. It involves less frequent trading than day trading, aiming to profit by riding trend waves. It is a style that can be pursued alongside a regular job.

The minimum trading unit when buying and selling stocks. In Japan, one trading unit is generally 100 shares. For example, a stock priced at 1,000 yen requires a minimum of 100,000 yen (1,000 yen x 100 shares).

An investment style where stocks are held over a long period of several years or more. It aims for asset growth through company expansion and compound interest effects without being affected by short-term price movements. It is one of the most recommended investment methods for beginners.

An investment method where you regularly purchase financial products in fixed amounts, such as monthly or weekly. It can be started with small amounts and benefits from dollar-cost averaging, making it particularly suitable for beginners. It is also utilized through the systematic investment quota in the new NISA.

A short-term trading strategy where buying and selling are completed within the same day. Since it aims to profit from daily price movements, constant market monitoring is required. While there is potential for large profits, it is also a high-risk approach.

A financial product where funds collected from many investors are managed by professional fund managers. It allows diversified investment from small amounts, making it easy for beginners to start. Management costs (trust fees) apply.

A type of account where the brokerage calculates your annual trading gains and losses. Choosing "with tax withholding" eliminates the need for tax filing, making it recommended for beginners. Most investors use this type of account.

A strategy of regularly investing a fixed amount to average out the purchase price. You buy fewer shares when prices are high and more when prices are low, reducing the risk of buying at peaks. It is a fundamental strategy for systematic investing.

A tax-advantaged system for individual investors where profits from investments within a NISA account are tax-free. From 2024, the new NISA offers two frameworks: a savings investment quota and a growth investment quota. It is the first system beginners should take advantage of.

Money distributed to shareholders from a portion of the company's profits. Not all companies pay dividends; growth companies often reinvest profits. Dividend amounts are shown per share.

The difference between the current market price and the purchase price of stocks you hold. If the market price is higher than the purchase price it is called an unrealized gain, and if lower, an unrealized loss. It is not a confirmed profit or loss until you actually sell.

The effect where reinvesting investment returns generates further returns, causing assets to grow like a snowball. It is most powerful in long-term investing, and Einstein reportedly called it "the greatest invention of mankind."

An investment strategy that reduces risk by spreading investments across multiple stocks and asset classes. Following the famous saying "don't put all your eggs in one basket," if one stock falls, others can compensate.

The combination of financial assets you hold, such as stocks, bonds, and mutual funds. It is constructed considering the balance of risk and return. The optimal portfolio varies depending on age and investment goals.

When a stock buy or sell order is completed. Execution occurs when the buyer's and seller's conditions match. Market orders execute almost immediately, while limit orders won't execute until the desired price is reached.

A general term for securities that have financial value, including stocks, bonds, and mutual funds. Those that can be traded on stock exchanges are called "listed securities." It is a fundamental concept in investing.

Methods for understanding and minimizing the possibility of investment losses. Representative techniques include diversification, setting stop-loss rules, and managing investment amounts. It is one of the most important skills in investing.

Trading with an amount exceeding your own capital, a term derived from the principle of a lever. Margin trading allows about 3.3x leverage (with a 30% margin requirement), while forex offers even higher ratios. Since both profits and losses are amplified, risk management is extremely important.