Types of Investments
A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company
What is a Stock?
This action increases the number of shares in a company but does not change the total market capitalization (value) of the company; thereby making shares more affordable.
What is a Stock Split?
An asset or item that is acquired with the goal of making a profit
What is an Investment?
An investing account for individuals to earmark funds for their retirement years.
What is an Individual Retirement Account (IRA)?
Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis
What is a Dividend?
A security in which the investor loans money to a company or government, which then pays regular interest to the holder and returns the principal on the maturity date.
What is a bond?
A market where shares in corporations are bought and sold through an organized system
What is a Stock Exchange?
The process of setting money aside to increase wealth over time for long-term financial goals such as retirement
What is Investing?
A collection of stocks and/or bonds combined into one group which will be traded as a unit, typically chosen and actively managed by an "expert" in exchange for a fee from each investor?
What is Mutual Fund?
Prices of this type of fund can change throughout the day as they are exchanged on the market
What is an ETF?
Investment accounts that are commonly offered by employers
What is a 401K?
Open this type of account that lets individual investors trade stocks, bonds, mutual funds, and other investments.
What is Brokerage Account?
A market where shares in corporations are bought and sold through an organized system.
What is a Stock Exchange?
The rate at which the price of goods increases and consumer purchasing power decreases over time
What is Inflation?
A market in which there is increased stock trading and rising stock prices
What is a Bull Market?
An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year
What is a Roth IRA?
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs
What is a Portfolio?
Buying and selling investments - typically individual stocks and funds - within a short time frame (from seconds/minutes to days/weeks) in hopes of making quick profits from the small price changes.
What is Active Trading
When reading a stock quote, this metric would gives you the best idea of the total value of the company
What is the market cap?
A market in which prices are falling, encouraging selling.
What is a Bear Market?
A low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks. Investor own a share of the portfolio, rather than shares of an individual company.
What is an Index Fund?
An online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners
What is a Robo-Advisor?
A long-term strategy for building wealth by buying investments - typically index funds - and holding them for many years to minimize trading and costs. Research shows that 85-95% of these funds perform better than actively managed funds over the long run.
What is Passive Investing?
A type of investment fund that rebalances its asset mix over time based on a projected retirement year
What is a Target Date Fund (TDF)?
Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for
What is Capital Gain?