Investing Unit

Return

the money an investor receives above and beyond the sum of money initially invested

Asset Allocation

the process of spreading your assets among several different types of investments to lessen risk

Stock Market

A general term used to describe all transactions involving the buying and selling of stock shares issued by a company.

Stock

A share of ownership in a corporation.

Dividends

Company's share profits to the shareholders based on the corporation's performance.

Risk

Degree of uncertainty of return on an asset; in business, the likelihood of loss or reduced profit.

Bond

Loan you give to an organization

Actively managed mutual fund

Managed by a fund manager who charges a fee

Target Date Funds

Often mutual funds where the mix of stocks, bonds, and other investments changes over time until the target date based on that fund's strategy.

share

Piece of ownership in a company, mutual fund or other investment

Index Funds

Provide a low-cost, diversified investment option that closely matches the overall return of a given index, such as the S&P 500

Fund Manager

Someone who oversees a mutual fund and makes the investment decisions for the fund.

Diversification

Spreading out investments to reduce risk

Risk Tolerance

The degree, amount, or volume of risk that an organization or individual will withstand.

Disadvantage of a robo-adviser

You many not be able to get advice from a human financial advisory when you want it

Shareholder

You may receive dividends from the company, if the company pays them, and you have ownership of a portion of a company

Mutual Fund

an investment program funded by shareholders that trades in diversified holdings and is professionally managed.

Robo-Advisor

an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners