Name that Thing!
This represents a piece of ownership in a company.
What is a stock? (Common, preferred)
This measures the general rise and fall in the prices of goods and services within an economy.
What is Inflation?
The dollar cost between the price to buy and the price to sell.
What is the spread? (Bid/Ask Spread)
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This is the periodic process of selling investments with gains and buying investments with losses in order to maintain a specific asset allocation.
What is rebalancing?
The name for a bond issued by the US government.
What is a treasury bond?
These are debt instruments purchased by investors, which are then paid back by the borrowing entity over a fixed period.
What are bonds?
A government agency in charge of setting monetary policy within the US. Hint: this entity establishes and adjusts the Federal Funds Rate.
What is the Federal Reserve?
A business that matches buyers and sellers.
What is a brokerage firm?
The cost to operate a mutual fund or ETF which is passed through to investors, often quoted as an annual rate.
What is an expense ratio?
!!!!!!!!!!!!!!!QUADS!!!!!!!!!!!!!!!
This type of stock pays its holders dividends before holders of common stock. These payments are often fixed to a set rate, which make these investments a sort of blend between fixed income and equity.
What is preferred stock?
This is an investment vehicle funded by shareholders that holds various investments which are professionally managed.
What is a mutual fund?
A measure of the total output of goods and services in an economy. Hint: this is probably the most recognized economic indicator.
What is Gross Domestic Product (GDP)?
This type of order is executed immediately but the trader must take whatever the current going price is.
What is a market order?
The mathematical concept of earning interest on top of interest, exponentially increasing investment returns the longer investments are held.
What is compounding?
This is a valuation of a company which is calculated by multiplying the current stock price by the number of shares outstanding.
What is market capitalization?
These are similar to mutual funds, but can be traded on exchanges, much like shares of stock.
What are exchange traded funds (ETFs)?
What is a tariff?
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This type of order would be entered if an investor wants to buy or sell an investment at a specific price, and the trade generally does not immediately get filled.
What is a limit order?
This fundamental investment principle reduces overall portfolio risk by investing across many asset classes, resulting in more stable returns.
What is diversification?
These are the periodic payments made to bond holders.
What is a coupon?
This is a grouping of investments that meet certain criteria, often used as benchmarks to compare performance with hand-selected portfolios. Investors generally cannot invest directly into these.
What is an Index?
A term used for a market that is generally trending upward for a certain length of time.
What is a bull market?
This refers to the process of investing fixed dollar amounts over a period of time to avoid market timing.
What is dollar-cost averaging?
Portfolios are generally matched with these to compare performance. Hint: Active fund managers typically strive to outperform this.
What is a benchmark?
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An issue of new shares in a company to existing shareholders in proportion to their current holdings. This increases the number of shares outstanding and lowers the stock price.
What is a stock split?