Overview of Investing

Miranda thinks she's ready to invest in the stock market. What should she have done to prepare? She should have paid off credit card balances, saved up an emergency fund, and learned the basics about investing. She should have learned about all types of investing, even the most complicated investment types. She should have invested in a mutual fund. She should have purchased a home and saved enough to live for three to six months.

she should have paid off credit card balances, saved up an emergency fund, and learned the basics about investing.

stock

a certificate representing a share of ownership in a company

mutual funds

a collection of money from a group of investors that is used to buy different investments, like stocks, bonds, and real estate, managed by professionals

rate of return

a percentage that shows how much gain or loss an investment makes

retirement account

a plan for setting aside money to be spent after retirement

IRA

a retirement account that lets you save and invest money tax-free until you withdraw it when you retire

403(b)

a retirement plan available to employees of nonprofit organizations, such as schools and hospitals

401(k)

a retirement plan that some private corporations offer their employees

share

a single unit or equal part of stock

A real estate investment is as safe as putting your money in a savings account. True False

false

Using money to try to make more money is called _____. saving investing trading diversifying

investing

The rate of return is the _____. interest you earn from stock the money that is returned to you when you sell an investment percentage that shows how much gain or loss an investment makes a number that lets you know how risky an investment is

percent that shows how much gain or loss an investment makes

List at least four investment alternatives.

stocks, mutual funds, retirement investments, real estate

fund manager

the professional who decides where to invest money in a mutual fund

investing

using money in order to try to make more money

Choose all that apply. Select all of the types of retirement accounts. IRA mutual fund IDA 401(k) 403(b) CD

IRA 401(k) 403(b)