A market in which there is increased stock trading and rising stock prices.

Profit from the sale of an asset, such as a stock or bond, calculated by subtracting the price you initially paid from the price you then sold it for.

A tax levied on profit from the sale of property or an investment.

The growth of an investment where earnings, such as dividends or interest, are reinvested to generate additional earnings over time.

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

The practice of investing in a large variety of stocks, bonds, and/or funds to reduce your overall risk.

Money from the profits of a company that is paid out to its shareholders, typically on a quarterly 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.

Exchange-Traded Fund (ETF)

A collection of stocks and/or bonds that are traded on securities exchanges. Unlike mutual funds, they can be traded throughout the day like an individual stock.

A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing.

Individual Retirement Account (IRA)

An investing tool for individuals to earmark funds specifically for their retirement.

The rate at which the price of goods increases and consumer purchasing power decreases over time.

The illegal act of trading a company's stock using information that is not available to the public.

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

An asset or item that is acquired with the goal of making a profit.

Market Capitalization

Market value of a company's outstanding shares calculated by multiplying the current share price by the number of shares outstanding.

Micro-Investing Platform

An application that allows users to regularly save small sums of money.

A bond, often having tax advantages for individual investors, issued by a state or local government to pay for public works.

A collection of stocks and/or bonds combined into one fund, typically chosen and actively managed by an 'expert' in exchange for a fee from each investor.

The second largest stock exchange in the world behind the NYSE.

New York Stock Exchange (NYSE)

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

Nominal Rate of Return

The rate of return that does not account for inflation or taxes.

A long-term strategy for building wealth by buying investments - typically index funds - and holding them for many years to minimize trading and costs.

A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement.

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.

The number of goods and services that money can buy. It can weaken over time due to inflation.

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

The rate of return that accounts for inflation and taxes.

Degree of uncertainty on how likely the investor is to make money on an investment.

An online wealth management service that provides automated, algorithm-based portfolio management advice.

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year.

A person, company, or institution that owns at least one share in a company.

A financial asset, such as a stock or a bond, that can be bought and sold in a financial market.

An index of 500 large-cap companies chosen based on their size, industry, and other factors.

A federal program that provides monthly benefits to millions of Americans, including retirees and military families.

A share of the value of a company, which can be bought, sold, or traded as an investment and gives the investor partial ownership of the company.

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.

A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years.

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, that allows an individual to save for retirement while deferring taxes until funds are withdrawn.

Investment Terms Flashcards Flashcards

Student preview

48 questions

Show all answers

1.

FLASHCARD QUESTION

Front

Active Trading

Back

Buying and selling investments - typically individual stocks and funds - within a short time frame (from seconds/minutes to days/weeks) in hopes of making quick profits from the small price changes.

2.

FLASHCARD QUESTION

Front

Asset Allocation

Back

Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash.

3.

FLASHCARD QUESTION

Front

Asset Class

Back

A group of financial instruments that have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash).

4.

FLASHCARD QUESTION

Front

Bear Market

Back

A market in which prices are falling, encouraging selling.

5.

FLASHCARD QUESTION

Front

Bond

Back

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.

6.

FLASHCARD QUESTION

Front

Bond Rating

Back

A measurement of the likelihood that a bondholder will be paid back.

7.

FLASHCARD QUESTION

Front

Brokerage Account

Back

An account that lets individual investors trade stocks, bonds, mutual funds, and other investments.

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