Investing Unit Vacob

Investing

Putting money into assest to grow wealth over time

Saving

Storing money safley for short-term goals

Trading

Short-term buying and selling of investments

Compound Interest

Earning interest on both your original money and past interest

Stock

Ownership in a company

Dividend

A payment made to shareholders

IPO (Initial Public Offering)

First time a company sells shares to the public

Market Cap

Total value of a company (share price x number of shares)

Stock Split

When a company increases shares and lowers price proportionally

Mutual Fund

A collection of many investments bundled together

Diversification

Spreading money across investments to reduce risk

Passive Investing

Matching the market with low fees

Active Investing

Trying to out perform the market with a human manager

Brokerage Account

Account used to buy and sell investments

Dollar-Cost Average

Investing the same amount on a regular schedule

Risk Tolerance

How comfortable you are with investment risk

Retirement

Living off savings/ investments instead of working full-time

Social Security

Government retirement income funded by payroll taxes

Pension

Employer-funded retirement plan with guaranteed income

401(K)

Employer retirement plan with possible matching

Traditional IRA

Tax break now, payay taxes later

Roth IRA

Pay taxes now, withdrawl tax-free later

Robo-Advisor

Automated investing platform using algorithms

Micro-Investing

Investing small amounts like spare change

ROI ( Return on Investment)

The presentage gain or loss on an investment

Inflation

the increase in prices over time, reducing purchasing power

Expense Ratio

Of stock or asset fund is the total percentage of fund assets used for adminstrative, management, advertising, and all other expenses