Consumer Economics vocab chapter 12

investing

the process of setting money aside to increase wealth over time for long-term financial goals, such as retirement

ROI (return on investment)

the measurement of gain or loss generated on an investment relative to the amount of money invested

Risk-Return Ratio

relationship of expected return (profit you expect to make) compared to the amount of risk (amount you stand to lose if the price goes down) taken with a given investment

liquid asset

an asset that can be easily bought or sold

stock market

a financial market that trades shares of ownership of public companies

stock

a security that represents part ownership or equity in a company

stock market index

measurement of a section of the stock market, typically a weighted average of the prices of selected stocks

bull market

when prices in a financial market are on the rise or expected to rise

bear market

when prices in a financial market experience a prolonged decline

fixed annuity

annuity that offers low, guaranteed rates of interest and fixed income payments in retirement

variable annuity

a type of annuity that can vary in value based on the performance of the mutual funds inside it