Vocabulary: Investing

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Index Fund

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A low-fee portfolio of stocks chosen to track or mimic a stock market index, removing the human element of investing.

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Micro-Investing Platform

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An application that allows users to regularly save small sums of money.

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Real Rate of Return

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The rate of return that accounts for inflation and taxes.

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Stock

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A share of the value of a company, which can be bought, sold, or traded as an investment, giving the investor partial ownership.

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Risk

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Degree of uncertainty on how likely the investor is to make money on an investment.

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Dividend

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A portion of a company's earnings distributed to shareholders.

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Mutual Fund

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An investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks and/or bonds.

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Bond

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A fixed income instrument that represents a loan made by an investor to a borrower.

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Asset Allocation

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The process of dividing investments among different asset categories, such as stocks, bonds, and cash.

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Stock Exchange

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A marketplace where stocks are bought and sold.