Glossary Terms:

Developing a Financial Investment Portfolio

Glossary terms from:
http://www.econedlink.org/e566


Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Choice

Decision made or course of action taken when faced with a set of alternatives.

Deposit

Money put into a financial account. Also, to place money in a financial account.

Goal

Something a person or organization plans to achieve in the future; an aim or desired result.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Investment

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Portfolio

A person's or an institution's collection of savings and investments.

Return

Earnings from an investment, usually expressed as an annual percentage.

Risk

The chance of losing money.

Saving

Disposable income (income after taxes) minus consumption spending.

Savings

Money set aside for a future use that is held in easily-accessed accounts, such as savings accounts and certificates of deposit (CDs).

Stock

An ownership share or shares of ownership in a corporation.

Stock Market

A market in which the public trades stock that someone already owns; the buying and selling of stock.

Wants

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.

Work

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.