Personal Finance vocan Flashcards

A long-term, growth-oriented investment representing ownership in a company; also known as 'equity.'

Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.

An investment that tracks the performance of many investments as a way of measuring the overall performance of a particular investment type or category.

&nbsp;<span>Very similar to mutual funds, except that they trade throughout the day on stock exchanges as if they were stocks. This means you can actually pay more or less than the value of the underlying holdings in the fund.<br><br></span>

Some investors prefer to buy real estate through real estate investment trusts, which trade as if they were stocks and have special tax treatment

Acts like a loan or an IOU that is issued by a corporation, municipality or the U.S. government. The issuer promises to repay the full amount of the loan on a specific date and pay a specified rate of return for the use of the money to the investor at specific time intervals.

. A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year and other conservative investments.

Is an account that allows you to save money typically at a fixed interest rate for a fixed amount of time—say, 6 months, 1 year or 5 years

Invest in raw materials or primary agricultural products. These funds invest in precious metals, such as gold and silver, energy resources, such as oil and natural gas, and agricultural goods, such as wheat.

A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.

No

One investment purchases a group of assets

You have more time for your money to compound

Dollar cost averaging

An index that tracks the stocks of 500 large U.S. companies

An account is an arrangement in which an investor deposits money with a licensed brokerage firm, which places trades on behalf of the customer.

A plan for setting aside money to be spent after you complete working.

Is an investment account for retirement savings. Which income taxes on certain deposits and on all gains are deferred until withdrawals are made after 59½.

An investment account for retirement savings allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free.

A qualified retirement plan, which means it is eligible for special tax benefits (Pre-tax, Post-tax, Roth, Annuity) You can invest a portion of your salary, up to an annual limit ($20,500)

Are retirement savings plans that serve employees of public schools and tax-exempt organizations. Contributions are made through payroll deductions. The IRS limits the amount that employees can contribute.

Is a long-term agreement (contract) between you and an insurance company that allows you accumulate funds on a tax-deferred basis for later payout in the form of a guaranteed income that you cannot outlive

A plan that is a tax-advantaged account that can be used to pay for qualified education costs, including college, K-12, and apprenticeship programs.

A tax-advantaged account created for or by individuals covered under high-deductible health plans (HDHPs) to save for qualified medical expenses.

A financial account (such as a bank account, a trust fund, or a brokerage account) set up for the benefit of a beneficiary, and administered by a responsible person, known as a legal guardian or custodian, who has a fiduciary obligation to the beneficiary

Your money remains tax-deferred in this account until you withdraw (taxed as income)

Which is NOT a good reason to buy a stock fund like the S&P 500?

one year

Money paid by a company to its shareholders

The ratio between a mutual fund's operating expenses for the year and the average value of its net assets.

Is a mutual fund, sometimes trading as an ETF, that allows an individual to "invest" in group of companies such as the S&P 500.

A rise in the prices of goods and services, often equated with loss of purchasing power.

The amount paid by a mutual fund to the investment advisor for its services.

The amount and frequency with which an investment fluctuates in value.

An index tracking the stocks of 30 large U.S. companies

stocks

false

true

An approach to managing capital that involves setting parameters for different classes such as equities (e.g., ownership or stocks), fixed-income (e.g., bonds), real estate, cash, or commodities (e.g., gold or silver)

The degree to which you can tolerate volatility in your investment values

The process of owning different investments that tend to perform well at different times in order to reduce the effects of volatility in a portfolio, and also increase the potential for increasing returns.

A portion of a company's profit paid to common and preferred shareholders.

Asset purchased with an investment life of less than a year. Taxed at your personal tax rate.

A strategy that looks past the day-to-day fluctuations of the stock and bond markets and responds to fundamental changes in the financial markets or the economy.

A risky investment strategy that calls for buying and selling securities in anticipation of market conditions.