18 terms

Lesson 11: Investing 101

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Terms in this set (...)

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.
capital gain
an increase in the value of an asset; profit resulting from the sale of an asset.
cash flow
difference between what the landlord collects in rent and pays out in expenses; cash flow can be break even, negative or positive.
common stock
a share of stock that represents ownership in a corporation but doesn't pay a regular dividend.
debenture
an unsecured bond.
debt security
a tradable financial instrument in the form of a bond.
diversification
a risk management technique allocating investment dollars among a variety of investments.
dividend
a portion of a corporation's profit that is distributed to shareholders.
equity security
shares of stock in a corporation.
income stream
a flow of money generated by a business or an asset.
mutual fund
a professionally managed investment fund that pools the money of many individual investors to purchase large blocks of stock or other securities.
portfolio
an investor's collection of investments.
preferred stock
stock that pays a regular dividend.
Real Estate Investment Trust
"REIT"; a company or fund that pools investors money and invests in income producing real estate.
Return on Investment
"ROI"; a profitability ratio used to evaluate an investment; calculated by dividing the return of the investment - by the cost of the investment.
securities market
a public market for buying and selling stocks and bonds.