investing vocab Flashcards
rate of return
the ratio of money gained or lost on an investment relative to the amount of money invested
traditional IRA
an individual retirement account that allows a person to set aside pre tax income up to a specified amount each year
security
a financial asset, such as a stock or bond that can be bought and sold in a financial market
stock
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
401K match
an employer contribution made to their employees retirement plan based on individual employees contributions
401k plan
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that allows an individual to save for retirement and have the savings grow well deferring taxes until funds are withdrawn
bond
Security in which the investor loans money to a company or government, which event page regular interest to the bondholder, and returned the principal on the bonds maturity date
bond rating
a measurement of the likelihood that a bondholder will be paid back
capital gain
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
coupon
the annual interest payment on a bond usually expressed as a percentage of its dave value
diversification
the practice of investing in a large variety of stocks, bonds. And or funds as a way to reduce your overall risk
roth IRA
an individual retirement account that allows a person to set aside after tax income up to a specified amount each year
pension
Retirement account offered in some jobs, actors or companies that employer maintains to give an employee a fixed of payout at retirement
Dividend
Money from the prophets of a company that is paid out to his shareholders typically on a quarterly basis
Individual retirement accounts
And investing tool for individuals to earmark funds specifically for the retirement
Dollar cost averaging
The practice of putting a fixed amount into an investment over a period of time, regardless of the price of that investment
Initial public offering
The first time a company becomes publicly, traded by issuing stock that may be bought and sold on the market
Dow Jones industrial average
An index that tracks the stocks of a sec group of 30 large well established financially sound companies that are leaders in their industries
Large cap stock
A stock with market capitalization over 10 billion
Market capitalization
Market value of a companies, outstanding shares, calculated by multiplying the current share price by number of shares outstanding
Mid-cap stock
A stock with market capitalization over 1 billion in less than 10 billion
Index fund
Alofi, portfolio of stocks, chosen to track or mimic a stock market Index there by removing the human element of investing because no one is choosing the individual stock
municipal bond
A bond that 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
Mutual fund
A collection of stocks and bonds combined into one final, which we treated as a unit, typically chosen, and actively managed by an expert in exchange for a fee from each investor
NASDAQ
Second largest stock exchange in the world behind the NYSE
New York Stock Exchange
The worlds largest stock exchange with its 2800 traded company valued at over 21 trillion
S and p 500
An index of 500 large cap companies, chosen based on their size industry, and other factors used to represent the entire market
Small cap stock
A stock with market capitalization between 300 million and 1 billion
Stock exchange
A Market, where shares in corporations are bought, and sold through an organized system
treasury bond
A bond generally considered to be a risk-free investment
