Asset: what you own. A home, car, jewelry, and art are all examples of assets.

Asset allocation: your entire portfolio of investments that balance risk (loss) and return (reward) by adjusting the percentage of each asset.


Basis point (Bps): 1/100 of a percent. Examples: 50 bps = 0.50% and 100 bps = 1.0%

Bond: a loan to an entity (corporation, government, etc.) for a specified period of time at a variable or fixed interest rate.

Bond market: facilitates the transfer of capital from savers to the issuers for needed capital to fund government projects, business expansions, and ongoing operations.

Brokerage account: account held with a licensed brokerage firm that allows an investor to deposit money and place investment orders. The standard fee for one trading is ~ $10/transaction. Some examples are Charles Schwab, eTrade, Fidelity, MerrillEdge, ScottTrade, and TD AmeriTrade.


Commodity: raw goods.

Commodities market: selling and buying raw or primary goods. There are two types, hard and soft. Hard commodities include gold, silver, rubber, oil, etc. Soft commodities include corn, wheat, coffee, sugar, soybeans, pork, etc.


Debt: what you owe. A student loan, mortgage, car loan, and credit card balances are all examples of debt.

Debt market: see “Bond market”

Demand: how much (quantity/amount) is desired by buyers.

Disposable income: income after taxes


Equity market: see “Stock market.”


Financial market: a place where buyers and sellers trade or exchange assets.


Gross Domestic Product (GDP): the most important measure of a country’s economy. It can calculated a few different ways, but the calculations should be roughly the same. The income measure is the value of the income generated; this metric most considers profits and wages. The expenditure measure is the value of all goods and services purchased by households and the government, investments, and net exports; here’s the equation: GDP = Consumption + Government Expenditure + Investments + (Exports – Imports). If the GDP is growing, then the economy is doing well. If GDP is declining, then the economy is doing poorly; two consecutive declining GDP quarters is considered an economic recession.


Investment: an act of devoting time, effort, or energy to a particular undertaking with the expectation of a worthwhile result.

Individual Retirement Account (IRA): set up with a financial institution and allows and individual to save for retirement. Similar to other retirement accounts, there is a Roth and Traditional account. Additionally, there is a Rollover option, for when individuals leave an employer and want to access and control all of their retirement savings in one place.


Liquid asset: an asset that can be quickly converted to cash. Cash is the most liquid asset, whereas investments, like stocks and bonds, are less liquid because they require 3-5 business days to sell for cash.


Market capitalization, or market cap: the total dollar value of a company’s shares.

Example: If a company has 10 million shares outstanding and each share is worth $50, then the market cap is $500 million ( $10 million shares x $50 / share).

Company Size Breakdown: LARGE CAP: >$10 billion, MID CAP: $2 billion – $10 billion, & SMALL CAP: <$2 billion


Net worth: what you own (assets) minus what you owe (debts). In short, it’s your wealth.


Performance: calculated by  (New price – Old price) / Old price. For example, Toyota (TM) stock new price (10/31/15) is $122.62 and the old price (10/31/15) is $92.81.

(New price – Old price) / Old price =

($122.62 – $92.81 ) / $92.81 =

0.32119 or 32.12%

POCs: people of color; ethnic minorities.


Retirement savings accounts: the most common accounts types are 401Ks and 403Bs offered through an employer. There is the option to pay taxes now (Roth) versus later, at retirement (Traditional).


Stock: ownership in a corporation, allowing a claim on part of the corporation’s assets and earnings.

Stock market: where shares of a corporation are issued and traded.

Supply: what is offered/available in the market.


Ticker symbol: an abbreviation used to as a form of identification on an exchange or in the market. Example: Apple stock is represented using the ticker, AAPL.


WOCs: women of color