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| money together from thousands of small investors |
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| investment fund traded on stock exchanges, much like stocks |
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| reducing risk by spreading investments |
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| open-end funds that employ a portfolio manager in an attempt to post a better return |
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| Percentage of assets used for expenses of the fund |
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| mutual funds track specific stock or market indexes; no investment decisions |
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| growing at a faster rate due to reinvestment of stocks |
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| investors believe the market has under-priced |
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| when a bond reaches the end of it life |
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| amount the bond pays at maturity |
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| any market for a security after the initial issue |
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| ready supply of cash in bank prodcuts or money market mutual fund you can tap in a hurry |
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| sold by life insurance companies and are regular series of payments that continue for set period of unitl you die |
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| contract with an insurance company that pays fixed amount for period of time |
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| contract with an insurance company that pays a minimum interest rate (usually low) |
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| use of borrowed money to increase your purchasing power |
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| real estate investment trusts |
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| closed-end funds that invest in real estate and mortgages |
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| relationship of risk to reward |
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| allocating major asset classes based on life circumstances |
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| brokerage firms provide account representatives to handle your business |
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| brokers focus on quick trades and straight-forward execution |
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| earnings from a mutual fund account automatically buys more shares of the fund |
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| investing a fixed amount on a regular basis in a mutual fund |
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| legal document required by securities and exchange commission |
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| daily value of mutual fund that includes all the assets minus the funds liabilities conerted to a per-share price |
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| fund that trades on stock exchanges like a common stock |
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| make up largest number of funds on the market |
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| result when an asset is sold for a profit |
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| focus on companies with higher than average growth |
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| aim for even greater returns, but add an element of risk |
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| value mutual funds invest in companies that the market may have overlooked |
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| carve out small pieces of stock or bond market |
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| socially responsible funds |
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| socially responsible funds put ideals about certain issues into their stock selection process |
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| invest in companies in certain foreign countries |
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| market cap is number of shares outstanding multiplied by the per share price |
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| special type of stock that companies issue |
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| percentage of your portfolio occupied by stocks and bonds |
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| help investors keep their stock and bond mix correct as they move closer to retirement |
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| come in variety of configurations that can be taxable or nontaxable |
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| differ slightly from other funds; attempt to keep net asset value at constant $1 |
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| tax-free money market funds |
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| invest in securities that generate tax-free income |
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| also known as class A shares; charges a fee |
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| charge declining fee based on how long you leave money in the fund |
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| include marketing fee and exit fee usually around 1% |
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| all loaded funds and many no-load funds charge this and it goes to marketing and advertising |
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| single most important number to consider when looking at the ongoing cost of holding fees |
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| online tools that investors use to narrow down possible investment candidates |
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| legal document that must accompany any request for info about purchasing a mutual fund |
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| made up of 500 leading companies in their markets |
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| investment in a mutual fund includes and dividends, capital gains distributions, and interest income |
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| one of the three major national exchanges, although it doesn't get as much attention from general public as the NY stock exchange |
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| mutual fund or exchange traded fund that is broad based and central to an investor's investment strategy |
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| profits when used without a modifying term to describe another function |
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| securities and exchange commission |
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| main regulatory agency responsible for monitoring the stock markets and securities industry |
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| large financial institutions that handle the initial distribution of shares during an IPO |
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| employee of a member firm of the NYSE; responsible for maintaining market in particular stocks |
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| like NYSE w/o physical presence |
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| make a market for a stock they cover by providing a quote at which they would buy or sell the stock |
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| Exchange traded funds (ETF) |
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| similar to mutual funds in that they are baskets of stocks or bonds but traded like stocks |
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| used to measure the change in a particular set of numbers |
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| continually grow until dramatic drop occurs |
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| represent mature, stable companies that pay consistent dividends |
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| marked decline in prices of goods and service; usually accompanied by high unemployment |
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| looks at future to determine what to buy |
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| very concerned with knowing precise value of companies they consider for investment |
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| way of reporting earnings or profits on a per share of stock; annual earnings/# of shares |
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| avoid mistakes buying and selling stocks |
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| don't love stocks, act on hot tips, forget cost of trading, diversify poorly, speculate, not sell, give up too soon |
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| tangible assets such as stocks, bonds, cash, real estate, and other types |
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| execute a sell order when price of stock drops to a specific level |
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| similar to stop loss orders; used by investors to protect profit |
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| give owner right but not obligation to buy a certain # of stock shares at a fixed price on/before certain date regardless of current market price |
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| price specified in stock option that owner can pay for shares of stock |
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| period set by management for stock options to become valid |
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| calculating return on investment |
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| simple return=net proceeds+dividends/amount paid-1 |
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| amount a bond pays at maturity |
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| when a bond reaches the end of its financial life and face value is returned to owner |
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| rise in cost of goods and services |
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| issuer pays owner the full face value of bond |
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| term used by companies that means reducing the number of employees |
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| qualified retirement accounts |
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| designated by IRS for special treatment, such as tax-deffered growth, while funds remain in the account |
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| term the iRS uses to designate how money coming out of most retirement plans will be taxed |
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| pay or salary before any taxes, insurance payments, or any other deductions are made |
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| what your dollars will buy relative to another point in time |
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| addresses the concept that a dollar today is better than a dollar tomorrow |
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| mathematical means by which interest earned during one period adds to the principal, then the next period interest is earned on the resulting principal plus interest in the first period |
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| SS, medicare, and income tax withheld each payday by your employer |
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| medical situation that existed before you applied for any type of insurance |
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| calculate retirement benefits using a formula that applies percentage to an average salary and adds in a longevity bonus for number of years worked |
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| similar to defined benefit plans except there is no reward for longevity and employees can take the plan with them if they change jobs |
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| contract with life insurance company guaranteeing certain payout over a period |
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| defined contribution plans |
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| provide employee opportunity to invest pre-tax money deducted on a regular basis in a group of mutual funds and other investments |
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| qualified defined contribution plan offered by employers. allows employees to have certain percentage of their salary deducted and invested in the plan |
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| retirement plan for religious, educational, and other non-profit groups. this plan may use tax-deferred annuities instead of mutual funds |
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| refers to investment vehicles that allow principal and interest to grow without paying taxes on earnings until sometime in the future |
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| maintains the account and keeps records of deposits and withdrawals |
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| adjusted gross income (AGI) |
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| first cut at adjusting your gross reported income |
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| another name for any retirement plan that takes it contribution before withholding taxes are calculated |
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| rate banks charge their very best customers |
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