click below
click below
Normal Size Small Size show me how
Methods of Saving an
Methods of Saving and Calculating Returns
| Term | Definition |
|---|---|
| bond | A financial security that represents a promise to repay a fixed amount of funds |
| brokers | Independent firms or individuals whose principal function is to bring buyers and sellers together to make sales. |
| bull market | A period of increased stock trading and rising stock prices |
| capital gain | the amount by which the selling price of an asset exceeds the purchase price |
| certificate of deposit | a debt instrument issued by a bank |
| compound interest | interest calculated on both the principal and the accrued interest |
| diversification | A strategy for company growth through starting up or acquiring businesses outside the company's current products and markets |
| dividends | Company's share profits to the shareholders based on the corporation's performance. |
| FDIC ..., | Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits initially of up to $2500, raised to $5000 in 1934, and frequently thereafter; continues today with a limit of $100,000 |
| full service brokerage firm | talk to you, offer recommendations, most expensive |
| index fund | a mutual fund that invests in the stocks that are the basis of a well-known stock or bond index` |
| inflation | A continuous rise in the price of goods and services |
| interest | A sum paid or charged for the use of money or for borrowing money |
| investment portfolio | The collection of investments you personally hold, including stocks, bonds, money market accounts, and savings accounts. |
| IPO | Initial Public Offering |
| Liquidity | Availability of resources to meet short-term cash requirements. |
| market price | The point where supply and demand are equal |
| maturity date | The date on which an investment becomes due for payment. |
| mutual funds | A pool of money used by a company to purchase a variety of stocks, bonds or money market instruments. Provides diversification and professional management for investors. |
| NYSE | New York Stock Exchange |
| JSE | Johannesburg Stock Exchange |
| principal | (1) A sum loaned or employed as a fund or an investment, as distinguished from its income or profits. (2) The original amount (as in loan) of the total due and payable at a certain date. (3) A main party to a transaction. |
| rate of return | Earnings from an investment, stated as a percentage of the amount invested; usually calculated on an annual basis. |
| dollar cost averaging | Investing the same amount on a regular basis no matter if the market is high or low. |
| investment portfolio | A collection of assets that provide diversification for an investor. |
| Bear Market | When the stock market is steadily declining. It could be a few months or many years. |
| Systematic Savings | A saving strategy that involves setting aside cash on a regular basis to achieve a goal. |