Vocabulary

• Gold – A precious metal that is used as a global standard of monetary exchange, in jewelry, and in technology.
• Investment Portfolio – A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, as well as their fund counterparts.
• Asset – Anything of value owned by an individual or corporation that can be converted into cash.
• Asset Allocation – The implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investor's risk tolerance, goals, and investment time frame.
• Diversification – The practice of spreading investments among different types of assets to reduce risk.
• Equity – Ownership interest in a corporation in the form of stock or shares.
• Bond – A debt instrument issued by a government or a company to raise capital, with the promise to repay the capital along with interest on a specified date.
• Commodities – Basic goods used in commerce that are interchangeable with other commodities of the same type.
• Bull Market – A market condition in which the prices of securities are rising, or are expected to rise.
• Bear Market – A condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining.
• Inflation – The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Deflation – The decrease in the general price level of goods and services.
• Risk Tolerance – The degree of variability in investment returns that an investor is willing to withstand.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Return on Investment (ROI) – A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.
• Mutual Fund – An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and similar assets.
• Volatility – A statistical measure of the dispersion of returns for a given security or market index.
• Hedge – An investment to reduce the risk of adverse price movements in an asset.
• Exchange-Traded Fund (ETF) – A type of investment fund and exchange-traded product, with shares that are tradable on a stock exchange.
• Stock Market Index – A measurement of a portion of the stock market calculated from the prices of selected stocks.
• Capital Gain – An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
• Dividend – A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
• Interest Rate – The amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed.
• Yield – The income return on an investment, such as the interest or dividends received from holding a particular security.
• Broker – An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
• Financial Advisor – A professional who helps individuals manage their finances by providing advice on money issues such as investments, insurance, mortgages, estate planning, and retirement.
• Tax – A financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures.
• Pension – A fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work.
• Retirement Plan – A financial arrangement designed to replace employment income upon retirement.
• Insurance – A contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
• Credit – The granting of a loan and the creation of debt.
• Debt – An amount of money borrowed by one party from another.
• Loan – A thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
• Mortgage – A loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty.
• Real Estate – Property consisting of land and the buildings on it, along with its natural resources.
• Currency – A system of money in general use in a particular country.
• Exchange Rate – The value of one currency for the purpose of conversion to another.
• Recession – A significant decline in economic activity spread across the economy, lasting more than a few months.
• Economic Growth – An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.
• GDP (Gross Domestic Product) – The monetary value of all the finished goods and services produced within a country's borders in a specific time period.
• Fiscal Policy – The use of government revenue collection (taxation) and expenditure (spending) to influence the economy.
• Monetary Policy – The process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.
• Derivatives – Financial contracts that derive their value from an underlying asset. These could be stocks, indices, commodities, currencies, exchange rates, or the rate of interest.
• Leverage – The use of borrowed capital for an investment, expecting the profits made to be greater than the interest payable.
• Private Equity – Capital that is not listed on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies.
• Venture Capital – A type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual exit strategy.
• IPO (Initial Public Offering) – The first sale of stock by a company to the public.
• Securities – A financial instrument that represents some type of financial value. The term often refers to any form of financial instrument, but its legal definition varies by jurisdiction.
• Financial Market – A market in which people trade financial securities and derivatives at low transaction costs.
• Financial Regulation – A form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions, and guidelines, aiming to maintain the integrity of the financial system.