Test 10

• Bear market?


  A market with generally stagnant or falling stock prices
• Bonds?


  Interest-earning loans to the government, corporations, or municipalities. Different types of bonds can be more or less risky, and bonds can have high yields or low yields (interest rates).
• Bull market?


  A market with generally rising stock prices.
• Diversification?


  Owning a collection of investments (such as stocks from different industries, stocks from both small and large companies, bonds, and money market funds) in order to spread risk and have a safer overall investment.
• Financial Planner?


  An investment advisor who can help you define and reach your financial goals.
• Investment Horizon?


  The amount of time an investor holds on to a portfolio of investments before cashing them out.
• Investment Portfolio?


  The collection of investments you personally hold, including stocks, bonds, money market accounts, and savings accounts.
• Large-Cap Stock?


  Stocks of very large companies, such as Walmart, General Electric, and IBM, that have a market capitalization of between $10 billion and $200 billion.
• Small-Cap Stock?


  Stocks of largely unknown companies with smaller market capitalization, or dollar value of total stock ownership. Small-cap stocks generally have a market capitalization between $300 million and $2 billion.
• 401(k) Plan?


  A type of employer-sponsored retirement plan in which money is contributed on a pre-tax basis and all earnings are tax deferred.
• Annuity?


  An investment contract made with an issuer (for example, an insurance company). Types include immediate, deferred, fixed, and variable.
• Defined-Benefit Plan?


  A type of retirement plan, usually a pension, in which the payment amount is guaranteed.
• Defined-Contribution Plan?


  A type of retirement plan in which the amount invested in the plan is controlled by the employee, with no guarantee of benefits.
• Employer-Sponsored Retirement Plan?


  A savings plan for retirement that is offered through a company’s benefits package; contributions are usually matched by the company.
• IRA (Individual Retirement Account)?


  A type of retirement savings plan that is not usually done through an employer; traditional IRAs are tax deductible and earnings are tax deferred.
• Keogh Plan?


  A retirement savings plan for self-employed professionals or owners of small businesses; it affords the same tax benefits as a 401(k).
• Pension?


  A fixed sum paid regularly by an employer to an employee after retirement.
• Retirement?


  Permanent withdrawal from the workforce.
• Roth IRA?


  A type of IRA that is not tax deductible but may not be subject to income tax upon withdrawal.
• Social Security?


  A United States government program established in 1935 that includes a retirement benefit for citizens; it is funded by payroll taxes.
• Vested Balance?


  The amount of money currently invested in a retirement plan.