Investment Basics
The money used to purchase an investment
What is capital?
Owning a small piece of a company
What is a share of stock?
The possibility of losing money on an investment
What is investment risk?
A fund that holds a collection of different investments
What is a mutual fund or ETF?
This electric vehicle company’s CEO became the world’s wealthiest person through companies including Tesla and SpaceX.
Who is Elon Musk?
Spreading investments across different assets to reduce risk
What is diversification?
The stock market index that tracks 500 leading US companies
What is the S&P 500?
The ability to quickly convert an investment into cash
What is liquidity?
A loan to a government or company that may pay interest
What is a bond?
This entrepreneur's company was founded as an online bookstore before it grew into one of the largest global ecommerce company.
Who is Jeff Bezos?
Money a company distributes to shareholders from its profits
What are dividends?
A market in which stock prices are generally rising
What is a bull market?
The risk of losing purchasing power because prices rise
What is inflation risk?
A strategy of investing a fixed amount regularly, regardless of market prices
What is dollar cost averaging?
This fruit inspired company cofounder helped revolutionize personal computers, smartphones, and digital music with products like the iPhone and iPod.
Who is Steve Jobs?
Earning returns on both your original investment and previous returns
What is compound interest?
The process of selling company shares to the public for the first time
What is an initial public offering (IPO)?
The increase in value of a asset
What is appreciation?
An investment fund designed to track a market index
What is an index fund?
This Microsoft cofounder helped popularize computers and later became known for his philanthropic work through the foundation named after him.
Who is Bill Gates?
The portion of a company’s profits remaining after expenses are paid
What are earnings?
The electronic stock exchange famous for listing many technology companies
What is the Nasdaq?
The risk that an investment’s value will fluctuate
What is market volatility?
The strategy of choosing investments to try to outperform the market
What is active investing?
This technology entrepreneur cofounded PayPal and Palantir Technologies and was an early investor in Facebook.
Who is Peter Thiel?