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Investing Vocabulary
| Question | Answer |
|---|---|
| dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash | asset allocation |
| a group of financial instruments which have similar financial characteristics and behave similarly in the marketplace (like stocks, bonds, and cash) | asset class |
| a market in which the prices are falling, encouraging selling | bear market |
| a security in which the investor loans money to a company or government, which then pays regular interest to the bond holder and returns the principal on the bonds maturity date. | bond |
| an account that lets individual investors trade stocks, bonds, mutual funds, and other investments | brokerage account |
| a market in which there is increased stock trading and rising stock prices | bull market |
| profit from the sale of an asset, such as a stock or bond, calculated by subtracting the price you initially paid from the price you then sold it for | capital gain |
| a tax levied on profit from the sale of property or an investment | capital gain tax |
| reinvesting earned interest back into the principal to allow money to grow exponentially over time | compound interest |
| the practice of investing a large variety of stocks, bonds, or funds as a way to reduce your overall risk | diversification |
| money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis | dividend |
| a low-fee portfolio of stocks chosen to track or mimic a stock market index, thereby removing the human element of investing because no one is choosing the individual stocks | index fund |
| a collection of stocks or bonds combined into one fund which will be traded as a unit, typically chosen and actively managed by an expert in exchange for a fee from each investor. | mutual fund |
| the second largest stock exchange in the world behind the NYSE | NASDAQ |
| the worlds largest stock exchange, located in new york city | NYSE |
| a collection of financial instruments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and EFTs. | portfolio |
| a financial asset, such as a stock or bond, that can be bought and sold in a financial market | security |
| an index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market | S&P 500 |
| a share of the value of a company, which can be bought, sold, or traded as investment and gives the investor small partial ownership of the company | stock |
| a market where shares in corporations are bought and sold through an organized system | stock exchange |
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skyee <3