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 S & P 500 | An index of 500 stocks chosen for market size and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe. |
| Stock | A type of security that signifies ownership in a corporation. |
| Bond | certificate that promises to repay money loaned, plus interest, on a certain date. |
| New York Stock Exchange (NYSE) | largest floor- based stock exchange in the USA; referred to as the Big Board. |
| Dow Jones | The average price of 30 selected industrial stocks, used as a measure of general market trends. (Also known as the DOW). |
| NASDAQ | A major stock exchange that handles trades through a computerized network - National Association of Securities Dealers Automated Quotations |
| Securities and Exchange Comission (SEC) | Has authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public. Watches for insider trading. |
| Identity Theft | forging of someone's identity for the purpose of fraud |
| Three C's of Credit | character, capacity, and collateral |
| Dividend | check paid to stockholders representing a portion of corporate profits |
| Compounding Interest | Earning interest on interest. |
| Mutual Fund | fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets |
| 401K / 403B | A defined contribution plan that takes out money from an employee's paycheck before income taxes and invests it for purposes of retirement savings. Taxes are paid when you take out your money. |
| FICA | Federal Insurance Contributions Act; tax levied on employers and employees to support Social Security and Medicare. SS is 6.2%, and Medicare is 1.45%. |
| Principal | the original amount deposited or borrowed |
| Money Market Savings Account | A type of savings vehicle that usually requires high minimum balances but offers higher interest rates. |
| Index Mutual Fund | A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover. |
| Actively Managed Mutual Fund | Mutual funds that employ a protfolio manager to buy and sell securities in an attempt to beat the S and P index. Uaually incur higher expenses than index funds. 80% fail to beat an index fund over the long-term. |
| Annual Percentage Rate (APR) | cost of credit expressed as a yearly percentage |
| Grace Period | length of time you have before you start accumulating interest |
| Roth IRA | An individual retirement account funded with after-tax contributions that allows for tax-free withdrawals at age 59 1/2, or for your 1st house down payment. May withdraw your principal at any time without penalty. |
| 529 College Savings Plan | Govt. sponsored investment vehicle that allows earnings to grow free from federal taxes if used to meet college education expenses. |
| Bull Market | Rising stock market |
| Bear Market | Declining stock market |
| Credit Card | A card used for payment through credit with interest accruing on the unpaid balance |
| No-Load Mutual Fund | A mutual fund that does not charge a fee to get into it or to leave it. |
| Certificate of Deposit (CD) | A type of investment in which you deposit an amount of money for a fixed amount of time at a stated interest rate |
| Compounding Interest Formula | V = P (1+r) ^ n. V = Value, P = Principal, r = Annual Interest Rate, n = Years. |