Macro Mindsets
A general increase in prices and a fall in the purchasing value of money
What is Inflation?
An animalistic term describing a market where prices are rising
What is a Bull Market?
Earning interest on both the principal and the accumulated interest from previous periods
What is Compound Interest?
Unlike a stock, this financial instrument represents a formal loan made by an investor to a borrower
What is a Bond?
The total value of all goods and services produced within a country’s borders in a year
What is GDP?
A 3-letter acronym for the first time a company sells stock to the public.
What is an IPO?
A three-digit number used by lenders to determine creditworthiness.
What is a Credit Score?
Periodic payments of profits made by a corporation to its shareholders.
What is a Dividend?
This term describes a long period of declining economic activity, often marked by higher unemployment.
What is a recession?
An investment vehicle that pools money to purchase a diversified portfolio of securities
What is a Mutual Fund (or ETF)?
A retirement account allowing pre-tax contributions and tax-deferred growth.
What is a Traditional IRA?
The "fixed" amount a bondholder receives when the bond reaches maturity.
What is Face Value (or Par Value)?
When increased government spending leads to a reduction in private sector investment.
What is Crowding Out?
This represents a share of ownership in a company that people can buy and sell.
What is a stock?
This is a plan that helps you track your income and expenses so you don’t spend more than you earn.
What is a budget?
The relationship between bond prices and these is typically inverse.
What are Interest Rates?
This law states that when the price of a good goes up, people usually buy less of it.
A place where stocks are traded.
What is a stock exchange?
This is the cost of money.
What is interest?
A bond issued by a company with a low credit rating, offering a higher interest rate for higher risk.
What is a Junk Bond?