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that allows an individual to save for retirement and have the savings grow while deferring taxes until funds are withdrawn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)