Investing Vocabulary Review

A set of vocabulary flashcards to aid in understanding key investing terms and concepts.

Rate Of Return / Return on Investment (ROI)

The ratio of money gained or lost on an investment relative to the amount of money invested.

401(k) Plan

A retirement savings plan through your employer who will often match your contributions.

Bond

A security in which the investor loans money to a company or government, which then pays regular interest and returns the principal at maturity.

Capital Gain

Profit from the sale of an asset, calculated by subtracting the initial purchase price from the selling price.

Coupon

The annual interest payment on a bond, as a percentage of its face value.

Diversification

Investing in a variety of stocks, bonds, and/or funds to reduce overall risk.

Dividend

Money from the profits of a company paid to shareholders, typically on a quarterly basis.

Index Fund

A low-fee portfolio of stocks designed to track or mimic a stock market index.

Individual Retirement Account (IRA)

An investing tool earmarked for retirement savings.

Mutual Fund

A collection of stocks and/or bonds combined into one fund, managed by an expert.

New York Stock Exchange (NYSE)

The world's largest stock exchange, located in New York City.

Pension

A retirement account maintained by an employer to provide fixed payouts at retirement.

Exchange Traded Funds (ETFs)

Investment funds traded on stock exchanges, much like stocks.

Roth IRA

An individual retirement account allowing after-tax income to be invested for retirement.

Stock

A share of a company's value that can be bought, sold, or traded.

Traditional IRA

An individual retirement account allowing pre-tax income to be invested for retirement.

Risk

The degree of uncertainty regarding the potential return on an investment.

Investing

The process of allocating money to increase wealth over time for long-term goals.

Inflation

A general increase in prices, resulting in a decrease in purchasing value of money.

Portfolio

A collection of financial investments including stocks, bonds, commodities, and mutual funds.