Investing

Mutual Fund

A collection of stocks and/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

Social Security

A federal program that provides monthly benefits to millions of Americans, including retirees, military families, surviving families of deceased workers, and disabled individuals

Security

A financial asset, such as a stock or a bond, that can be bought and sold in a financial market

Target Date Fund

A fund that automatically resets the asset mix of stocks, bonds, and cash in its portfolio according to a selected time frame that is appropriate for a particular investor

Index Fund

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

Pension

A retirement account, offered in some job sectors or companies, that an employer maintains to give an employee a fixed payout at retirement

401(k) Plan

A retirement savings plan, sponsored through your employer who will often match your contributions, that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn

Bond

A security in which the investor loans money to a company or government, which then pays regular interest to the bondholder and returns the principal on the bond's maturity date

Stock

A share of the value of a company, which can be bought, sold, or traded as an investment and which gives the investor small partial ownership of the company

Brokerage Account

An account that lets individual investors trade stocks, bonds, mutual funds, etc.

401(K) Match

An employer contribution made to their employees' 401(k) plan based on individual employee's contributions

S&P 500

An index of 500 large cap companies chosen based on their size, industry, and other factors, used to represent the entire market

Dow Jones Industrial Average

An index that tracks the stocks of a set group of 30 large, well-established, financially sound companies that are leaders in their industries

Roth IRA

An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year

Traditional IRA

An individual retirement account that allows a person to set aside pre-tax income up to a specified amount each year

Individual Retirement Account (IRA)

An investing tool for individuals to earmark funds specifically for their retirement

Risk

Degree of uncertainty on how likely the investor is to make money on an investment

Dividend

Money from the profits of a company that is paid out to its shareholders, typically on a quarterly basis

Capital Gain

Profit from the sale of an asset, such as a stock or a bond, calculated by subtracting the price you initially paid from the price you then sold it for

Vesting Period

The minimum number of years a worker must be employed before the company's contribution to a retirement account becomes permanent.

Diversification

The practice of investing in a large variety of stocks, bonds, and/or funds as a way to as a way to reduce your overall risk

Rate Of Return

The ratio of money gained or lost on an investment relative to the amount of money invested; also known as return on investment (ROI).

Nasdaq

The second largest stock exchange in the world behind the NYSE

New York Stock Exchange (NYSE)

The world's largest stock exchange, physically located in New York City, with its 2800 traded companies valued at over $21 trillion (in 2017)