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1200 Vocabulary
PF
| Term | Definition |
|---|---|
| investing | the process of setting money aside to increase wealth over time for long-term financial goals, such as retirement |
| return on investment (ROI) | the measurement of gain or loss generated on an investment relative to the amount of money invested |
| risk-return ratio | relationship of expected return (profit you expect to make) compared to the amount of risk (amount you stand to lose if the price goes down) taken with a given investment |
| liquid asset | an asset that can be easily bought or sold |
| stock market | a financial market that trades shares of ownership of public companies |
| security | a tradable financial instrument representing ownership, a creditor relationship, or a contractual right to an asset, like stocks or bonds |
| stock | a security that represents part ownership or equity in a company |
| stock market index | a measurement of ta section of the stock market, typically a weighted average of the prices of selected stocks |
| bull market | when prices in a financial market are on the rise or expected to rise |
| bear market | when prices in a financial market experience a prolonged decline |
| annuity | a contract between you and an insurance company that provides a guaranteed stream of income, typically during retirement, in exchange for a lump-sum payment or a series of payments (premiums). |
| fixed annuity | annuity that offers low, guaranteed rates of interest and fixed income payments in retirement |
| variable annuity | a type of annuity that can vary in value based on the performance of the mutual funds inside it |
| portfolio | a list of your investments |
| prospectus | a description of the investing strategy the mutual fund management company will use to invest your money |
| Individual Retirement Arrangement (IRA) | a tax-advantaged investing account that people use to save for retirement |
| 401(k) | a qualified retirement savings plan offered by a company to its employees who contribute money from their gross pay |
| qualified retirement savings plan | an employer-sponsored retirement plan that has a special tax treatment |
| diversification | the practice of dividing the money a person invests among different types of investment in order to lower risk |
| capitalization | the total dollar market value of a company or how much a company is worth |
| retirement planning | the process of figuring out how much money you’ll need in retirement and creating a plan to get there |
| dividend | a distribution from the net profits of a company to its shareholders |
| estate planning | preparation of tasks to manage an individual’s assets after death |
| will | a legal document listing how a person wants their assets distributed after their death |
| charitable organization | an organization set up to provide help and raise money for those in need |
Created by:
dupreejp
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