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Heard the word but can't place it? Here's a list of the most common terms.

401(k): See 'Tax-deferred'  1. A 'tax-deferred investment account' offered by some employers.  Designed for retirement saving and investing. BIG Advantages.  You save and invest money tax free!!  Legally!!  It's sheltered from taxes until you withdraw money.  1) It's deducted from your gross pay - you don't pay income tax now.  2) It grows tax free.  3) If your employer contributes, that grows tax free too.  4)  When you leave the job, 'roll it over' into an IRA.  

403(b): Basically, a 401(k) for employees of educational and non-profit institutions.

Agencies: Bonds issued by units of the Federal Government other than the US Treasury. Examples are FHA, GNMA

Appreciation: Not the same as interest, yield or anything else.  Just the value.  Or Growth in the value of an investment. “Stock of WeedCo has appreciated 137% in the last 7 months.” 

Asset: Any item of real value.

Asset allocation: 'Don't put your eggs in one basket'.  Or Method of dividing invested monies among various asset classes.

Asset class: A general category of investments (stocks, bonds, cash, precious metals, real estate, etc.) Check out the Market Chart in the Reference Section

Bonds: A written 'IOU' for what you lent them, for how long, and how much interest they'll pay.  Or Interest-bearing debt issued by companies or government entities. 

Broker: A person or organization that sells investments for a commission.  You may pay the commission, or they get it from the company.  Or both.

Capital gains: See 'Appreciation'.  You bought it for $10 a month ago.  If you sell it for $20 now that's a capital gain of $10.   If you don't sell it - there's no capital gain - just an increase in value.  Or  The dollar amount of the growth in value of an investment above its’ original cost to the investor. Capital gains are not recognized until the investment is sold (converted to cash).

Commissions: Compensation to any individual or organization for the sale of an investment.

Contribution: Money deposited into an investment account. Usually refers to tax-deferred accounts.

Debt: See 'bonds'.  Money owed. In investments this typically refers to bonds.

Developed countries: Non-US countries with well-established economies. Examples are: Canada, Japan, Great Britain, France, Germany, etc.

Distribution: See '401k' or 'IRA'.  Money withdrawn from an investment account. Usually refers to a tax-deferred account.

Diversification: See 'Asset Allocation'.  Spreading your investments among different asset classes and among different securities within an asset class.

Dividend: A payment of company earnings to stockholders.

Domestic: Based in the United States. When referring to investments, the issuing entity is US-based.

Emerging markets: Countries with a less developed economy. Examples are: Brazil, Argentina, China, Russia, Mexico, Philippines, etc. See: Developed Countries.

Equities: Stocks. When you own stock you are a part owner Or have an “equity interest” in the company.

Fixed income: See 'Bonds'. When you own a bond, you are promised a fixed “income payment”.

Governments: See 'Bonds'.  Refers to “Government bonds” or debt instruments ('IOU') issued by the US Treasury or with the backing of  “the full faith and credit” of the US Treasury.

Index: 1. A performance gauge of a part (sector) of an investment market.  For example, the 'S&P 500 Index' gauges the performance of the domestic large-cap equities market.  2. You can also buy a security or mutual fund which more or less follows any Index's performance.  

Inflation: The annual rate of increase in prices.

Interest: See 'Bonds'.  Payment to the investor for “lending” money to the issuer/borrower.

International: Non-US markets.

IRA: Individual Retirement Account.

Large cap:  See 'Market Value/Market Cap'. A market (or grouping) of company stocks, each having a market value / market cap in excess of $1 billion. Check out 'categories' in the Reference Section Market Chart

Lesser-developed countries: see Emerging Markets

Market Value/Market Cap:  The total market worth of a company. Calculated by: [# shares of stock outstanding] X [current stock price]. 
For example:  WeedCo has 10 million shares priced at $10 per share = a market cap of $100 million. Or Bob'sCo has 1 million shares at $100 per share and therefore has the same market cap. Check out 'categories' in the Reference Section Market Chart

Mid cap: See ' Market Value/Market Cap'.  The market (or grouping) of companies with a market value/market cap of between $500 million and $5 billion. Check out 'categories' in the Reference Section Market Chart

Money purchase plans: A tax-deferred, employer-sponsored retirement plan. Especially good for small business.

Municipal bond: See 'Bond'. Debt instrument issued by a City or County government, agency or authority. The interest payments on these bonds are typically exempt from federal income taxes.

Mutual fund: A 'container' of equities (e.g. stocks) purchased from various market sectors.  Like a shock absorber, the fund is designed and balanced to smooth spikes in the market - and give a more consistent ride than you could get with a single stock.  
And since funds have professional managers,  you, the investor, can look at and buy shares of the fund instead of dealing with hundreds of individual stocks. 
There are 'load' (sales charge) and 'no load' funds.  Also compare funds' management fees and yields. 

Operating expenses: The costs of running a mutual fund, not including the management fee paid to the investment manager.  

No-load: No sales charge.

Profit sharing: Is one way to have a tax-deferred retirement plan.  

Portfolio: All of your investments including market, real estate, etc.  An investment is anything purchased with the intent of gaining value.  For example, a private car is not an investment, it is a consumer item. 

Qualified plan: an employer or union-sponsored retirement plan which meets IRS codes for special tax treatment.

Return: The total of [dividends + interest + increase in market value] of a security in a given period.

Risk:The chance you take.

Market risk: The general risk assumed simply by investing.

Portfolio risk: The combined risks of the mix of investments you have chosen.

Risk profile: Measures your personality and the chances you're comfortable taking.  Or a measure of your comfort with different levels of investment risk.

Risk tolerance: Where the rubber meets the road.  Or your willingness to assume an investment risk.

Rollover IRA: You left a job. You don't want to leave your 401k behind (we wouldn't either).  You open a Rollover IRA and have the 401 money transferred directly to it. Or an account established to accept distributions from qualified plans in order to maintain the tax-deferred status of the investments.

Roth IRA: Permits contributions of income (on which you already paid taxes) in exchange for the right to withdraw it later without having to pay any taxes.

Security: Generally used to reference a stock, bond, mutual fund...as in 'We sell securities'.  Or it's the evidence of an investment - the actual stock certificate or bond, etc. - usually kept at the brokerage or company unless you request them.

SEP: Simplified Employer Pension.

Small cap:  See ' Market Value/Market Cap'. Refers to companies with a market value/market cap of less than $1 billion. Check out 'categories' in the Reference Section Market Chart

Stocks: Evidence of ownership in a company.

Tax-free: See 'Bonds'.  Typically refers to Municipal Bonds, on which interest payments received are normally exempt from federal income tax.

Taxable: Typically refers to Bonds on which interest payments received are subject to federal income tax.

Tax-deferred: Account can grow without being subject to current taxes on the growth or income. Taxes are typically due only upon withdrawal.

Trading: The buying and selling of securities.

Vehicle: An account.  Carries your money to the market and carries your stocks / bonds / mutuals back.  Some are tax-deferred and some are not.  401s and IRA are examples.   Take a look at the Vehicle Diagram in the Reference Section
Or, refers to the conduit used to invest money. “Investors should concentrate their growth assets in tax-deferred vehicles.”

Venture Capital: high risk investing involving an equity investment in an unproven company (venture).

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