name
Portfolio
A collection of securities—such as stocks, bonds, mutual funds, and real estate
401k
A for profit company sponsored retirement plan
Mutual Fund
A pool of money collected from many investors to invest in over 200 companies
Annuity
A savings account (like social security) sold by an insurance company
Bear market
A steady drop in the stock market over a period of time
S&P 500
An index of 500 large cap companies used to represent the entire US market
A buy limit order
An investor wants to purchase shares of ABC stock for no more than $10. The investor could submit a limit order for this amount and this order will only execute if the price of ABC stock is $10 or lower.
What does APY stand for?
Annual Percentage Yield (rate of return)
What makes up a "Ticker Symbol" in the United States?
Between 1 and 5 letters only.
Government & Corporations sell these to people in order to gain capital (money) for big projects and other major expenses.
Bond
What's one thing you should NOT do in investing?
Constantly buying and selling your stocks
Liquidity
Easily converted quickly into cash without loss
It is unnecessary to have both emergency savings and investments. Pick the one that fits your needs and use it.
FALSE
People who invest in stocks cannot lose their money.
FALSE
What is the Dow Jones Index?
Following of the top 30 companies as a marker of how the market is doing
Money Market
Great for emergency fund and can write checks from it.
This is a mutual fund but can trade throughout the day like a stock.
Index Fund
If something is illiquid what does it mean?
It is hard to get your cash out of an investment.
What does it mean if the investment is volatile?
It often fluctuates in price...risky
What is 1 vital rule for investing?
Never invest in anything you don't understand
Who insures your stocks?
No one
Collectibles
Objects bought in the hope that they will grow in value
Equity
Ownership
A Share
Piece of ownership in a company
403b
Retirement plan found in nonprofit organizations, such as churches, hospitals, and schools.
Investing is....?
Risky
Certificate of Deposit (CD)
Saving account with a slightly higher interest rate
Which of these is a high risk, high reward investment?
Stock
Which type of investment allows you to buy a share of a corporation (ownership)?
Stock
What is Preferred Stock
Stock that gets paid dividends first.
Principal
The initial amount of money deposited or borrowed.
New York Stock Exchange (NYSE)
The world's largest stock exchange, physically located in New York City
What does it mean to diversify your investments?
To have your money in a lot different types of investments (foreign, secter, size, etc)
What is an IPO?
When a company first sells shares of stock to the public.
If you buy stock for $10 a share and sell it for $18 a share, which is true?
You have made money and it is called capital gains
Bull market
a steady rise in the stock market
This investment is a form of lending (debt) to a company or the government
bond
This investment generally draws the lowest amount of interest and has a fixed rate
bonds
Which of these investments typically offers the lowest risk?
bonds
Share of profits distributed in cash to stockholders
dividends
Type of mutual fund designed to reduce fees by investing in the stocks and bonds that make up the index
index fund
Rate of return on investment needs to be higher than the rate of ____________
inflation
The danger that money won't be worth as much in the future as it is today
inflation risk
Compound interest
interest earned on top of interest+principal
When a company combines the funds of many different investors and then invests that money in a diversified portfolio of a POOL of stocks and bonds
mutual funds
This reduces risk by spreading money among a wide array of investments
portfolio diversification
When investing in real estate, you can earn money by:
rent that tenants pay you or selling higher than bought
A higher ____ generally results in a higher ___ with investing
return, risk
Which investment is typically the most risky, but also has potential for great returns?
speculative
A share of ownership in a company
stock