Terms to Know: Investing


  • Bonds: issued by businesses and government units with a fixed schedule for future payments to the purchaser of the bond

  • U.S. Savings bonds: issued by the U.S. government so they’re typically long-term, low-risk investments

  • Dividend: money paid from a company to its shareholders (typically quarterly)

  • Shareholders: people who buy stock/own shares of a company

  • Stakeholders: anyone who is affected by a company’s decisions and would, therefore, develop an interest in the company

  • Initial Public Offering (IPO): the company’s stock price when it first switches from private to public

  • Stock: piece of a company; companies raise funds by selling parts (at their stock price) of their companies to consumers

  • Shorting a stock: betting that the stock’s price will decrease

  • Stocks can be bought and shorted on different exchanges, with the most commons ones being the NASDAQ and the NYSE (New York Stock Exchange)

  • Mutual Fund: a group of stocks, bonds, commodities, etc. that offers the investor diversification (a variety), making it less risky than investing in a single stock

  • 401(k): associated with your work employer, your employer will add money to your retirement portfolio depending on how much money you contribute from your salary

  • Individual Retirement Account (IRA): a specified, tax-deductible limit can be invested with the amount invested not being taxed until it’s withdrawn; cannot withdraw from IRA until 59 ½ years old

  • Roth IRA: similar to an IRA except you’re invested money is taxed at the time of the investment (not at the time of withdrawal)

  • Certificate of Deposit (CD): another method of placing money in the bank and receiving interest; the money placed in a CD cannot be withdrawn for a certain period of time

  • Maturity: the date when a financial instrument (like a bond) ends/stops giving out payments


Want to learn more? Here are some helpful Quizlets:


Sources include: NAIC, OppLoans, HelpWithMyBank

Photo credit: QuoteInspector.com