Bonds
When you lend money to a company or government and they promise to pay you back with interest, this is what you're buying
What is a bond
This is the most common U.S. stock market index, often used as a benchmark for index funds
What is the S&P500
This concept says a dollar today is worth more than a dollar in the future
What is Time Value of Money (TVM)
The largest stock exchange in the United States, located in New York
What is the NYSE (New York Stock Exchange)
Known as the “Oracle of Omaha,” this investor is famous for value investing
Who is Warren Buffet
Bonds pay this to investors regularly, usually expressed as a percentage of the face value
What is interest/coupon
The S&P 500 index fund invests in roughly how many of the largest U.S. companies
What is 500
This ratio shows a company’s stock price relative to its earnings per share
What is the P/E ratio (Price-to-Earnings)
A market condition where stock prices are generally rising
What is a bull market
This investor managed the Fidelity Magellan Fund and encouraged investing in companies you understand
Who is Peter Lynch
When a bond reaches this point, the investor gets their initial investment back
What is maturity
The first index fund for individual investors in the U.S. was created in this decade
What is the 1970s
This metric tells investors how much of each dollar of revenue is kept as profit
What is profit margin
This index measures the performance of 30 large, publicly traded U.S. companies
What is the Dow Jones Industrial Average (DJI)
This investor started BlackRock, the world’s largest asset management company
Who is Larry Fink
Bonds with higher risk that offer higher returns are often called this name
What are junk bonds/high yield bonds
This is the term for the strategy of investing regularly over time to reduce risk, often used with index funds
What is dollar-cost averaging
This ratio shows a company’s total debt compared to its total equity, indicating how much the company relies on borrowed money
What is debt-to-equity ratio
This term describes a rapid, widespread decline in stock prices, often accompanied by panic selling
What is a market crash
He is famous for his big bets on currencies and made billions shorting the British pound in 1992
Who is George Soros
What year did the Dutch government issue the first official government bond
1517
Index funds can reduce this type of risk by holding many different stocks instead of just a few
What is unsystematic risk
Calculated as operating cash flow minus capital expenditures, this metric indicates the cash a company can freely use for dividends, debt repayment, or growth
What is Free Cash Flow (FCF)
This measures how much a stock moves relative to the overall market
What is beta
This investor wrote “The Intelligent Investor”, a classic book on value investing
Who is Benjamin Graham