Studied by 0 people
Looks like no one added any tags here yet for you.
Asset Allocation
Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
Asset Class
A group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash)
Bear Market
A market in which prices are falling, encouraging selling
Bond
A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date
Bond Rating
A measurement of the likelihood that a bond holder will be paid back
Brokerage Account
An account that lets individual investors trade stocks, bonds, mutual funds, and other investments
Bull Market
A market in which there is increased stock trading and rising stock prices
Compound Interest
Reinvesting earned interest back into the principal to allow money to grow exponentially over time
Diversification
The practice of investing in a large variety of stocks, bonds, and/or funds as a way to reduce your overall risk
Dividend
Money from the profits of a company that is paid out to its shareholders, typically on a quartet basis
Dollar Cost Averaging
The practice of putting a fixed amount into an investment over a period of time, regardless of the price of that investment
Index Fund
A low fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks
IRA
An investing tool for individuals to earmark funds specifically for their retirement
Inflation
The rate which the price of goods increases and consumer purchasing power decreases over time
Investing
The process of setting money aside to increase wealth over time for long term financial goals such as retirement
Municipal Bond
A bond, often having tax advantages for individual investors, issued by a state or local government which typically uses the loan to pay for public works to benefit its citizens
Mutual Fund
A collection of stocks and or bonds combined into one fund which will be traded as a unit, typically chosen and actively managed by an expert in exchange for a fee from each investor
Pension
A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout retirement
Portfolio
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs
Rate of Return
The ratio on money gained or lost on an investment relative to the amount of money invested, also known as a return on investment ROI
Risk
Degree of uncertainties on how likely the investor is to make money on an investment
Roth IRA
An individual retirement account that allows a person to set aside after tax income up to a specified amount each year
Security
A financial asset, such as a stock or a bond, that can be bought and sold in a financial market
S&P 500
An index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market
Social Security
A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals
Stock
A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company
Stock Exchange
A market where shares in corporations are bought and sold through an organized system
Target Date Fund (TDF)
A type of investment fund that rebalances its asset mix over time based on a projected retirement year
Treasury Bond
A bond, generally considered to be a risk free investment, issued by the US Treasury with a maturity of more than 10 years
Traditional IRA
An individual retirement account that allows a person to set aside pre tax income up to a specified amount each year
Traditional 401(K) Plan
A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn
