Investing Basics
The ownership share of a company.
What is a stock?
The index that tracks approximately 500 large U.S. companies.
What is the S&P 500?
Profits from selling investments are called these.
What are capital gains?
Experts often recommend keeping this many months of expenses in an emergency fund.
What is 3–6 months?
This loan allows homeowners to borrow against their home's equity.
What is a HELOC (Home Equity Line of Credit)?
A fund that can hold hundreds of investments and trades throughout the day
What is an ETF?
The longest bull markets generally occur after these.
What are bear markets or market corrections?
Selling investments at a loss to reduce taxes is called this.
What is tax-loss harvesting?
This document specifies how assets are distributed after death.
What is a will?
Refinancing your mortgage can lower your monthly payment, but one downside is that it may do this to your loan.
What is extend the length (term) of the mortgage?
Owning many different investments to reduce risk.
What is diversification?
The year of the Great Financial Crisis.
What is 2008?
This retirement account offers tax-free qualified withdrawals.
What is a Roth IRA?
This insurance protects your income if you become unable to work.
What is disability insurance?
Homeowners generally build wealth through appreciation and paying down this.
What is their mortgage principal?
Historically, these have outperformed bonds over long periods.
What are stocks?
Historically, missing just a handful of these can dramatically reduce long-term returns.
What are the market's best days?
Municipal bond interest is generally exempt from this tax.
What is federal income tax?
This legal arrangement can help avoid probate.
What is a trust?
This IRS tax rule may allow homeowners to exclude up to $250,000 ($500,000 married) of gain when selling a primary residence.
What is the primary residence capital gains exclusion?
The amount an investment earns on top of previous gains.
What is compound interest?
Over long periods, the average annual return of the S&P 500 has been roughly this percentage before inflation.
What is about 10%?
The amount you pay for an investment before gains or losses.
What is cost basis?
Paying off this type of debt often provides one of the best guaranteed returns.
What is high-interest debt?
Investors often use this type of exchange to defer capital gains taxes when selling investment real estate.
What is a 1031 Exchange?