Glossary
The words, without the jargon.
Fifty investing terms in plain English. Each one ends with a calculator, so you can see the idea with real numbers.
New here? Start with these
Dollar-cost averaging (DCA) Investing a fixed amount on a fixed schedule, whatever the price. Compound interest Earning returns on your past returns. Index fund A fund that holds every stock in an index. FIRE Financial Independence, Retire Early. Expense ratio The yearly fee a fund charges, as a percent. Roth IRA A retirement account with tax-free withdrawals later.
- CAGR (compound annual growth rate)The steady yearly rate that gets from start to end value.
- Capital gainsProfit from selling above your cost.
- Capital gains taxTax on that profit, lower if held over a year.
- Coast FIRESaving enough early that growth covers retirement.
- Compound interestEarning returns on your past returns.
- Cost basisWhat you paid for an investment, for tax purposes.
- DiversificationSpreading money across many investments.
- DividendCash a company pays shareholders from its profits.
- Dividend yieldYearly dividends as a percent of the price.
- Dollar-cost averaging (DCA)Investing a fixed amount on a fixed schedule, whatever the price.
- DrawdownHow far a value falls from its last high.
- DRIP (dividend reinvestment plan)Automatically using dividends to buy more shares.
- Real returnReturn after inflation.
- RebalancingTrading back to your target mix.
- Recurring investmentAn automatic buy the app makes on your schedule.
- Risk toleranceHow much loss you can stomach without selling.
- Roth IRAA retirement account with tax-free withdrawals later.
- Rule of 7272 ÷ return = years for money to double.
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