Vocabulary
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money
liquidity
The government agency responsible for regulating the stock market
Securities Exchange Commission
This term describes when a stock is moving up
Bull Market
Mutual funds offer _______ risk compared to single stocks
lower
What is the employee offered retirement fund for private companies that sometimes offers a match? Uses PRE-TAX dollars.
401 K
Relationship of substantial reward compared to the amount of risk taken
risk-return ratio
Federal agency responsible for collecting taxes and for the interpretation and enforcement of the Internal Revenue Code
Internal Revenue Service
This term describes when a stock is moving down
Bear Market
Mutual funds offer instant ____________ of your portfolio, because you are investing in many different companies at once.
diversification
What is the retirement plan that is open to ANYONE that uses POST-TAX (after tax) dollars, and your earnings are tax free? ($5,500 per year max)
Roth IRA
A list of your investments
Portfolio
Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders
Dividend
True or false: You need a lot of money to start investing?
False!
Why is diversification important in a stock portfolio?
What is it called when your money that is invested earns interest on top of the interest it already earned?
(your money MAKING money)
compound interest
Piece of ownership in a company, mutual fund or other investment
Share
A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs
529 Plan
What is the Dow Jones Industrial Average?
A way of measuring the value or movement of the stock market.
What is it called when a fund tracks an entire INDEX of the market
Index Fund
What is more important when investing for your retirement: amount of money or amount of time?
Amount of time.
Securities that represent part ownership or equity in a corporation
Stocks
Something you buy from the government to finance military operations during war time
War Bonds
What is one of the LARGEST organized stock exchanges in the USA?
NYSE: New York Stock Exchange
Mutual funds are actively managed, which means a person is in charge of buying and selling the stocks inside the fund to try and _________ the market
beat/outperform
True or False: If you get in financial trouble, it is a good idea to take money out of your retirement account
FALSE
Money that is invested, either tax deferred or tax free, within a retirement plan
tax -favored dollars
A retirement plan that uses AFTER TAX DOLLARS where the maximum contribution is $5,500/year. ANYONE can open this.
Roth IRA
The average annual return of the S&P 500 (it's a %)
10%
If you invest $200 month in an index fund or mutual fund for 40 years, you will have over $__________ when you retire.
1 million
On top of salary, an employee ________ package is important to consider when looking for a job.
benefit