Investing Strategies & Concepts
The process of setting money aside to increase wealth over time for long-term financial goals such as retirement
What is Investing?
The world's largest stock exchange, physically located in New York City.
What is the New York Stock Exchange?
A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date.
What is a Bond?
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?
An account that lets individual investors trade stocks, bonds, mutual funds, and other investments
What is a Brokerage Account?
Degree of uncertainty on how likely the investor is to make money on an investment
What is Risk?
A market in which there is increased stock trading and rising stock prices
What is the Bull Market?
A bond, generally considered to be a risk-free investment, issued by the U.S. Treasury with a maturity of more than 10 years
What is a Treasury Bond?
A person, company, or institution that owns that least one share in a company
What is a Shareholder?
An investing tool for individuals to earmark funds specifically for their
retirement
What is Individual Retirement Account (IRA)?
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs
What is Portfolio?
A market in which prices are falling, encouraging selling.
What is a Bear Market?
A bond, often having tax advantages for individual investors, issued by a state or local government which typically uses the loan to pay for public works to benefit its citizens
What is a Municipal Bond?
Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis
What is a Dividend?
An individual retirement account that allows a person to set aside pre-tax income up to a specified amount each year
What is Traditional IRA?
Dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash
What is Asset Allocation?
A market where shares in corporations are bought and sold through an organized system
What is the Stock Exchange?
A measurement of the likelihood that a bondholder will be paid back
What is a Bond Rating?
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 a Capital Gain?
An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year
What is Roth IRA?
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. Research shows that 95% of active traders lose money.
What is Active Trading?
The second largest stock exchange in the world behind the NYSE
What is Nasdaq?
The rate of return that does not account for inflation or taxes
The illegal act of trading a company's stock using information that is not available to the public
What is Insider Trading?
A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn
What is Traditional 401(K) Plan?