SAVING & INVESTING
What is a savings account?
This is best for emergency funds and short-term purchases.
What is a stock?
This represents ownership in a company.
What is diversification?
This means spreading investments across different assets to reduce risk.
What is a brokerage account?
This account allows people to buy and sell investments like stocks and bonds.
What is a higher price than they paid?
One way investors make money is by selling a stock for this.
What is investing?
This helps people build wealth over the long term for goals like retirement.
What is a bond?
This is a loan made to a company or government.
What is higher risk?
Investors usually expect a higher return when taking on this.
What is an actively managed mutual fund?
This type of fund is managed by professionals who charge fees.
What is panic selling?
Investment app alerts during market drops may tempt investors to do this.
What is purchasing power?
When prices rise but income stays the same, this decreases.
What are dividends?
These are payments some companies make to shareholders from profits.
What is risk tolerance?
Before investing, people should understand this so they choose investments they are comfortable with.
What are index funds?
These funds track indexes like the S&P 500 and usually have lower fees.
What is a secured credit card?
This is NOT usually part of a long-term investment portfolio: ETF, bond fund, stock, or secured credit card.
What is compound interest?
This type of interest earns money on both the original amount and previously earned interest.
What is $350?
If you buy 10 shares at $45 and sell them at $80, this is your profit.
Now subtract:
800−450=350800-450=350800−450=350
So the investor made a $350 profit.
What is investment risk?
Investing in only one company’s stock increases this.
What is an ETF?
This investment option trades like a stock but contains many investments.
What are dividends and capital gains?
These are the two main ways investors earn money from stocks.
What is an S&P 500 index fund?
This investment can average about 7–8% long-term returns, although some years lose money.
What is the Board of Directors?
Shareholders may vote for members of this group.
What is a loss?
Even diversified investments can experience this during bad market years.
What is diversification?
A major reason index funds are popular is because they offer this at a low cost
What are long-term goals?
A long-term investor should focus more on this than short-term market swings.