Investing Basics
Owning a piece of a company
What is Stock
A workplace retirement account, often with an employer match
What is a 401(k)?
Higher potential returns usually come with higher ___
What is Risk?
This investment is very liquid.” Translation: you can easily do what?
What is sell it for cash?
Money you earn just for owning dividend-paying stocks.
What are dividends?
A “bundle” of investments you own.
What is a portfolio
A personal retirement account with tax-deductible contributions.
What is a Traditional IRA?
The “ups and downs” of the market.
What is volatility?
“We need to discuss your time horizon.” Translation: how long until you need the ___.
What is money?
A loan you make to a company or government.
What is a bond?
Spreading money across different types of investments.
What is diversification
A personal retirement account with tax-free withdrawals.
What is a Roth IRA?
How comfortable you are with investment risk.
What is risk tolerance?
“Your portfolio is overweight in tech.” Translation: you have too much of ___.
What is one type of investment?
hen you sell an investment for more than you bought it.
What is a capital gain?
Your mix of stocks, bonds, and cash.
What is asset allocation
Guaranteed income for life, once common in corporate jobs
What is a pension?
strategy of investing the same amount regularly, no matter the market.
What is dollar-cost averaging?
“Your returns are net of fees.” Translation: this is your return after paying ___
What are costs/fees?
The gradual increase in the cost of living over time
What is inflation?
When your investment earnings make more earnings
What is compound interest
An insurance product that can turn savings into a steady retirement paycheck. (What
What is an annuity?
The act of adjusting your portfolio back to target percentages.
What is rebalancing?
“We’re benchmarking to the S&P 500.” Translation: we’re comparing your investments to ___.
What is a market index?
A retirement account designed for self-employed individuals.
What is a SEP IRA?