College & Career Readiness - Chapter 6 - Investing
OTC Market
Virtual markets where stockbrokers conduct business through an electronic network of computers and telephones.
Secondary market
When investors purchase securities from other investors rather than from the issuing company.
Dollar-cost averaging
Strategy of investing a fixed dollar amount at regular intervals.
Bond
Certificate of debt issued by a corporation or government.
Investment portfolio
Collection of the investments a person has made.
Primary market
Exists when a company first sells stock to the public.
Bull market
Extended period of rising stock prices.
Securities
Financial assets issued by corporations, governments, and other organizations.
Money Market Mutual Fund
Fund that deals only in interest-paying, short-term investments, such as certificates of deposit and commercial paper.
Capital gain
Income that results from selling an asset for more than the purchase price.
Market order
Instructs your broker to buy or sell a stock at the best price available.
Stop Order
Instructs your broker to buy or sell a stock when and if it reaches a specific price.
Stock
Share in the ownership of a corporation.
Treasury bill
Short-term debt with maturity ranging from a few days to 52 weeks.
Diversify
Spreading risk by putting money in different types of investments.
Proxy
Stockholder's written authorization to have someone cast a vote on his or her behalf.
Series EE Bonds and Series I Bonds
An investment that is backed by the U.S. Government.
Initial public offering (IPO)
A company's first sale of stock to the public.
Prospectus
A legal document that gives a detailed description of a security.
Risk
A measure of the likelihood that something will be lost.
Real Estate Investment Trust (REIT)
A way to invest in real estate without the complications and financial commitment of owning property.
Dividend reinvestment plan (DRIP)
Allows investors to reinvest cash dividends by purchasing additional shares of stock.
Rate of return
Amount earned on an investment for a given period of time.
Yield
Amount of money earned on an investment, usually expressed as an annual percentage.
Risk tolerance
Amount of uncertainty a person is willing to handle.
Bear market
An extended period of falling stock prices.
Inflation
Overall rise in prices.
Investing
Purchasing a financial product or valuable item with the goal of increasing wealth over time in spite of possible loss.
Volatility
Quick and unexpected changes in value or price.
Market value
The price at which an investment can be bought or sold at a given point in time.
