PSC Open Architecture Phase 3 Flashcards
Stocks
Fractional pieces of publicly traded companies. If you own a company’s stock, you own a piece of that company.
Bonds
These are essentially loans. When you buy one, you are lending the company or government money and can earn income from interest on that loan.
Dividends
Earnings a company gives back to its shareholders, as determined by the board of directors.
Capital Gains
The value or money gained from an investment.
Security
A tradable financial asset.
Portfolio
A collection of financial assets.
Net Asset Value (NAV)
The amount that one share of a mutual fund is worth.
Share
Piece of ownership in a company, mutual fund or other investment.
Asset Class
A grouping of investments that have similar characteristics and are subject to the same laws and regulations. Cash, bonds, and stocks are the most common types that OneAmerica deals with.
Expense Ratio (AKA Management Expense Ratio)
Measures how much of a fund’s assets are used for administrative and operating expenses. Operating expenses reduce the fund’s assets, which reduces the return to investors.
Stable Value Fund
A portfolio of bonds that are insured to protect the investor against a decline in yield or a loss of capital. The owner will continue to receive the agreed-upon interest payments regardless of the state of the economy.
Diversification
A strategy that mixes a wide variety of investments within a portfolio in order to limit risk.
Lipper Funds
Comparative index funds.
