| A | B |
|---|
| security | Any type of investment bought and sold through financial markets. |
| income investment | Provides regular earnings (such as monthly interest or quarterly dividends or rent payments). |
| risk tolerance | Your comfort level with investing ups and downs. |
| investing | Buying something with the expectation it will make money for you. |
| time value of money | Idea that a dollar today is worth more than a dollar tomorrow – so invest sooner, to earn more than the rate of inflation. |
| annual percentage yield | The actual interest rate earned when compounding is taken into account. |
| stock | Investment in which you are buying a portion of a company. |
| diversification | A risk-reducing strategy of varying investments. |
| portfolio | The range of investments you hold. |
| saving | Setting aside and storing money for future use. |
| mutual fund | A tool to purchase shares in a variety of stocks and bonds. |
| certificate of deposit | Savings tool offering reasonable interest rates and low risk - but ties up your money for a specific amount of time. |
| IRA, 401k or 403b | Retirement plans designed to help with long term investing. |
| growth investment | Assets you believe have the potential to increase in value over time and have potential for big gains and/or losses. |
| bond | Investment in which you are essentially giving a loan to a corporation. |
| dividend | An amount corporations may pay in cash (or shares of stock) based on the amount of stock shares owned. |
| compounding frequency | How often interest is paid on your savings or investments. |
| stock exchange | Market where securities are bought and sold. |
| savings account | This savings tool yields low interest and is not very risky. |
| prospectus | Document that summarizes details about a mutual fund. |
