21st Century Student FinLit -Getting Personal SW

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WHAT DOES THAT MEAN?

TERM

DEFINITION

asset class

a grouping of similar type investments.

bond

a form of debt that corporations and governments issue to borrow money from the public.

brokerage account

an account held by an investor with a licensed brokerage firm which allows the investor to buy and sell securities and other investments. an increase in the value of an asset; profit resulting from the sale of an asset. difference between what the landlord collects in rent and pays out in expenses; cash flow can be break-even, negative or positive. a share of stock that represents ownership in a corporation but doesn’t pay a regular dividend.

capital gain

cash flow

common stock

debenture

an unsecured bond.

a tradable financial instrument in the form of a bond. PRODUCT PREVIEW a risk management technique allocating investment dollars among a variety of investments. a portion of a corporation’s profit that is distributed to shareholders. shares of stock in a corporation. a flow of money generated by a business or an asset. a professionally managed investment fund that pools the money of many individual investors to purchase large blocks of stock or other securities. an investor’s collection of investments. stock that pays a regular dividend. “REIT”; a company or fund that pools investors money and invests in income producing real estate. “ROI”; a profitability ratio used to evaluate an investment; calculated by dividing the return on the investment by the cost of the investment. a public market for buying and selling stocks and bonds.

debt security diversification

dividend

equity security income stream

mutual fund

portfolio

preferred stock Real Estate Investment Trust

Return on Investment

securities market

Access vocab ashcards at www.c21publishing.com

Caution! Let’s begin this chapter with a word of caution and some advice. There are many different types of investments, and investing can be a complicated and risky process. It is also key to building wealth. Like any activity involving your hard earned money, you should know what you are getting into when you invest. Learn as much as you can about investing (it’s actually very interesting), and before you invest in anything, read all of the disclosures and talk with a professional investment advisor . Understanding the potential risks

Chapter 11 | Investing 101 198

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