Investing Terms You Need to Know

Ryan Sterling
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Understand the finance basics and some of the instruments (types of financial products you can put your money towards) you can invest in.


What is it?

A stock is a share of ownership in a single company. Stocks are also known as equities. Stocks are purchased for a share price, which can range from the single digits to a couple of thousand dollars, depending on the company. 

What’s the catch? 

Stocks can be risky and volatile because they reflect the performance of the company each quarter, as well as take into account general sentiments the market has about the company's performance or global events (i.e. pandemic).  

How do I invest in stocks?

It’s generally recommended to purchase stocks through mutual funds or ETFs, which we'll talk about below.


What is it?

A bond is essentially a loan to a company or government entity, which agrees to pay you back in a certain number of years. In the meantime, you earn interest (money) for giving them a loan.

Tell me more...

Bonds are generally less risky than stocks because you know exactly when you’ll be paid back and how much you’ll earn. But they earn lower long-term returns, so they should make up only a small part of a long-term investment portfolio.


What is it?

A mutual fund is a mix of investments packaged together. Mutual funds allow investors to skip the work of picking individual stocks and bonds, and instead purchase a diverse collection in one transaction, which makes them generally less risky.

Ever heard of the S&P 500?

They’re a type of mutual fund called an index fund. Some mutual funds are managed by a professional, but index funds follow the performance of a specific stock market index. Index funds are able to charge lower fees than actively managed mutual funds. 

Did you know?

Most 401(k)s and retirement funds offer a curated selection of mutual or index funds with no minimum investment, but outside of those plans, these funds may require a minimum of $1,000 or more.


What is it?

Think of it like a stock and a mutual fund had a baby. Like a mutual fund, an ETF holds many individual investments bundled together. The difference is that ETFs trade throughout the day like a stock, and are purchased for a share price.

Hey, new investors

An ETF's share price is often lower than the minimum investment requirement of a mutual fund, which makes ETFs a good option for new investors or small budgets.


Anyone can invest and build wealth and everyone should be able to. We can help you navigate your pre-investing checklist and get you investing once you’re ready. Plus, we offer emotional support because, let’s face it, money is emotional.

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