Skip to main content
Staff Resources

401 (k) A retirement savings plan in which an employee can save some of their salary with special tax benefits. Some employers will even match the employees’ contributions.
Asset Anything you own that has value, such as shares of stock, a car, or a house.
Balance Sheet Summary of a company’s liabilities and assets (what it owes, and what it owns).
Bankruptcy The status of being unable to repay one’s debts. Bond – An investment in which the investor loans money to an entity (a company or a government) for a set period of time at a specified interest rate and/or repayment of principal.
Buy and Hold An investment strategy in which an investor buys stocks and holds them for a long period of time, regardless of fluctuations in the stock market.
Certificate of Deposit Also known as a CD. Banks issue CDs to customers for a fixed term and with a fixed interest rate; the customer must wait until the term is complete for the CD to “mature,” at which time the money is withdrawn with accrued interest.
Compound Interest Compound interest is interest that is paid on both the principal and also on any interest earned from the past. When principal, as well as past interest earn interest, a snowball effect of earnings occurs.
Corporation A legal entity that is separate and distinct from its owners. Credit – An agreement in which a borrower receives something of value and agrees to repay the lender at some future date.
Debit A debit is a decrease in your account, such as when you pay a bill. Another term frequently used with debit is “debit card.” Debit cards look very similar to credit cards, but when used it is similar to writing a check – the money is debited from a checking account.
Debt An amount that you owe.
Default The failure to pay a debt or make a payment when it is due.
Default Risk The risk that you will be unable to repay your debts, and therefore be “in default.”
Depreciation The decrease in the value of an asset over time, sometimes due to normal wear and tear.
Diversification A technique in which an investor tries to reduce risk by mixing a wide variety of investments within a portfolio.
Dividend The distribution of a portion of a company’s earnings to its shareholders.
Dow Jones Industrial Average An average made up of 30 large stocks that trade daily on the New York Stock Exchange.
Equity Another name for stock, representing ownership in a company.
Financial Planner An investment professional who helps clients meet their short- and long-term financial goals.
Fixed Asset Something that a company owns and uses in the running of its business, and which doesn’t get used up in the process, such as equipment or fixtures.
Gross Domestic Product The monetary value of all the goods and services produced within a country each year.
Income Money received either as compensation, such as a salary, or profit from an investment, such as interest earned on savings, or dividends from owning stock.
Individual Retirement Account Also known as an IRA. An account in which funds are set aside for retirement. There are several types of IRAs, some of which provide special tax benefits.
Inflation Rate The rate at which the general level of prices for goods and services is rising, and therefore also the rate at which purchasing power is falling.
Junk Bond A bond with an especially high risk of default.
Lease An agreement in which one party gains the use of a fixed asset, such as a building or equipment, and the other party receives rent and possibly a form of secured debt.
Liability Legal debts or obligations, in other words, where owing money, goods, or services.
Limited Liability Company Also known as an LLC. A business structure which allows owners to have limited personal liability for the debts and actions of the company.
Liquidity The extent to which an asset can be easily converted to cash.
Long-term Debt Loans and other financial obligations that have a term over one year.
Market Timing Trying to predict the future behavior of the stock market, by analyzing historical statistics and economic indicators.
Money Market Fund A mutual fund that invests only in securities that can easily be converted to cash and tries to avoid credit, market and liquidity risk.
Mortgage Specifically used with real estate purchases, this is a type of loan in which a house or property is used to secure the loan and which is repaid in installments over a set period of time.
Mutual Fund A type of investment that pools money of many investors to buy various securities such as stocks, bonds and/or cash-equivalents. They can provide diversification for investors.
NASDAQ The largest electronic screen-based equity securities trading market in the United States. Net Income – After all taxes and deductions have been subtracted from your gross income, net income is what you’re left with.
Net Worth In short, it’s the dollar value of how much wealth you have. It’s calculated by subtracting any liabilities from all of your assets.
New York Stock Exchange Also known as NYSE. A stock exchange that lists securities for a wide range of companies. Several thousand companies are traded on the exchange.
Portfolio The collection of assets – such as stocks, bonds and other investments – held by an investor.
Principal 1. In a savings account, the amount you initially invest. 2. In a loan, the amount you originally borrowed, distinct from any accrued interest.
Profit Margin Measures, usually as a percentage, how much out of every dollar earned, that a company gets to keep as profit, after expenses have been deducted from revenue.
Return Income realized from an investment, usually expressed as a percentage.
Risk The chance that a person can lose money on an investment.
Shareholder Anyone who owns at least one single share in a company. Also known as a stockholder.
Stock A type of security that represents ownership in a corporation. Owning stock in a company and having equity in a company mean the same thing.
Stock Split The splitting of a company’s existing stock into multiple shares, where the total value of all the share remains the same. In a stock split, an individual could end up with more shares at a lower price per share, but with the same total share value as before the split.
Stockbroker An agent who places orders for an investor to buy or sell stocks or other securities.
Yield The annual rate of return from income (dividends, interest, etc.) on any type of investment, usually expressed as a percentage.