Investing Tools Vocabulary
Bond: a form of lending to a company or the government.
Dividend: the share of profits distributed in cash.
Index: a group of similar stocks and bonds.
Index fund: a mutual fund that was designed to reduce fees by investing in the stocks and bonds that make up an index.
Inflation: the rise in the general level of prices.
Investing: the purchase of assets with the goal of increasing future income.
Market price: the current price that a buyer is willing to pay for stock.
Maturity date: the specified time in the future when the initial investment (principal) amount of the bond is repaid to the bondholder.
Mutual fund: created when a company combines the funds of many different investors and then invests that money in a diversified portfolio of stocks and bonds.
Rate of return: the total return on an investment expressed as a percentage of the amount of money invested.
Risk: the uncertainty regarding the outcome of a situation or event.
Stock: A share of ownership in a company.
Stockholder or shareholder: the owner of a stock.
Tax-sheltered investments: eliminate, reduce, defer or adjust the current year tax liability.