Basics
Putting money into something to make profit later
Investment
a period of generally rising stock prices. Investors Optimistic
bull market
Formula used to calculate interest earned on original money only
Simple Interest Formula
Group investment managed by professionals
Free Space
Free Space
A part-ownership in a company
Stock
Risk
If you invest $1,000 at 10% simple interest for 3 years. What is the simple interest?
$300
the money earned by a company
profit
Rank: collectibles, mutual funds, blue chip stocks (least risky first)
Mutual Funds, Blue Chips, Collectibles
A person who owns shares of a company
Shareholder / Stockholder
a period of generally falling stock prices. Investors pessimistic.
Bear Market
Money paid to shareholders from profits
Dividends
Spreading money across different investments
diversification
Why blue chip stocks are lower risk
Stable, big companies
A mix of different investments owned by one person
Portfolio
Higher Risk, Higher _________ __________.
Potential Reward
Rule used to estimate how fast money doubles
Physical items that gain value over time (art, coins, etc.)
Collectibles
a person who buys stocks or bonds with the hopes of earning a profit
investor
A large, stable company with strong history
Blue Chip Stocks
What is a Junk Bond?
Investment with high risk and high return potential
a booklet that contains information about a company that issues stocks and bonds to the public
prospectus
Main benefit of diversification
Reduce Risk
a certificate, written and sold by the government or a company that promises to repay borrowed money with interest
bond