Final Unit 4 Flashcards
our accumulated money and assets
wealth
someone who is retired and collecting Social Security is probably on
fixed income
buying and selling stocks and bonds
active investing
equities
stocks
loans that investors make to governments and corporations
bonds
their collection of various investments
portfolio
an interest charge that borrowers pay lenders for a loan
simple interest
when you earn interest on an investment for one year, the borrower will pay you interest based upon the higher second-year amount
compounding interest
accounts that are started by individuals
IRA Individual Retirement Accounts
when investors get a share of the profits
dividend
these are designed to provide a predictable monthly cash payment to the holder. these are sometimes funded by employers or individuals.
annuities
pays your beneficiary a set amount of money when you die
Universal Life Insurance
return
yield
to spread your money around between multiple mutual funds, stocks, and bonds
diversify
a pool of money that is invested by a manager in a specific type of security (stocks and bonds)
mutual fund
the most common investment vehicle today. most employers offer this investment type as a benefit. This allows you to save more and lower your taxable income
401k
usually a perk offered by older companies and unions. this organization with contribute money in the name of the employee.
pension plans
YTD
year to date
IPO
initial public offering
types of stocks
income stocks, growth stocks, preferred stocks
rate the types of stocks from least to most risky
preferred, income, growth
What are the different stock markets in the U.S.? Which is the biggest by dollar value?
Dow Jones Industrial, S&P, NASDAQ. NASDAQ
How can an investor track the overall performance of a stock market that day?
portfolio tracker
what do you call it when bonds expire
maturity
What do bond ratings tell you about their return/yield?
lower ratings, higher risk. high ratings, low risk
What is the primary reason people save for the long-term?
delayed gratification
short term savings
emergency money, vacation, repairs
long term savings
retirement, college costs, financial security
different types of bonds
savings bonds, treasury bonds, corporate bonds, municipal bonds
Many ways to help you save money
Individual Retirement Accounts (IRA), 401k, Pension Plans, Universal Life Insurance, Annuities
