[ Asset class ] An investment category such as stocks, bonds, cash, or real estate.
[ Diversified portfolio ] A group of investments in a range of asset classes.
[ Stockbroker ] An agent licensed to buy and sell stock on your behalf while earning a commission on the trades.
[ Financial planner ] An agent licensed to manage your assets and/or provide investing advice, usually for a fee or for an annual percentage of your wealth.
[ IRA (individual retirement account) ] Allows you each year to set aside and invest a fixed amount of money; the earnings are tax-deferred until they're withdrawn at retirement.
[ Mutual fund ] A fund that many shareholders invest in. It’s managed by an investment company and uses the money from selling shares to the public to invest in a range of stocks and bonds.
[ Stock mutual funds ] This is a mutual fund that invests primarily in stocks.
[ Index fund ] This is a mutual fund that invests in stocks listed in a certain index in order to mirror its performance.
[ High-yield savings account ] A deposit account opened at your bank where the money you deposit earns greater-than-average interest.
[ 401(k) ] A contribution plan offered by an employer that allows employees to set aside tax-deferred income for retirement. Employers typically offer a matching plan -- they either match all or part of the employee’s contribution.
[ Dow Jones industrial average ] An index of the top 30 highest-earning stocks that acts as a benchmark for the overall condition of the stock market.
[ S&P 500 ] An index of the 500 largest U.S. stocks that's used as a benchmark for mutual funds to compare investment returns.
by The Nest Editors
7/1/08
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