You spread your money between stocks and bonds so you are not relying on only one investment. - Diversification, A company manages your savings and decides where to invest so they can grow over time. - Asset Management, You hold stocks, bonds, and cash all together in one place. - Portfolio, You and many other people put your money together, and a manager uses that big pool to buy shares in many companies. - Mutual Fund, You buy ownership in Apple. This makes you part owner of the company. - Equity, A company is divided into 1,000 parts, and you buy one of those parts. - Share, A company pays you $2 every year for each unit of ownership you hold. - Dividend, You buy something for $50 and later sell it for $60. - Capital Gain, You buy something for $50 and later sell it for $40. - Capital Loss, You lend $1,000 to the government, and they promise to pay you back in 10 years plus 3% interest each year. - Bond, You invest in something that pays you $30 every year until it matures. - Fixed Income, You put $500 into a fund with other investors, and the manager uses the money to buy stocks and bonds. - Investment Fund, You buy ownership in Tesla. If Tesla grows in value, what you own grows too. - Stock, You buy one fund on the stock market. Inside it are pieces of 500 companies. - Exchange-Traded Fund (ETF), Stocks, bonds, and cash are grouped into categories because they react to the economy in similar ways. - Asset Class,

Finance Quest

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