Jargon,
decoded.

A rule of thumb for a “safe withdrawal rate,” drawn from 1990s research on historical U.S. returns: withdraw about 4% of your portfolio in year one, then adjust that dollar amount for inflation. It is a guideline, not a guarantee.

Example With $1,000,000 invested, a 4% first-year withdrawal is $40,000.

See also Escape velocity, Financial singularity, Portfolio

An employer-sponsored U.S. retirement plan funded from your paycheck, either pre-tax (traditional) or after-tax (Roth, if offered). Many employers add matching contributions. The IRS sets annual contribution limits.

Example If your employer matches 50% of the first 6% of pay you contribute, contributing 6% earns you an extra 3% of salary.

See also IRA, Roth IRA, Traditional IRA

The lowest and highest prices a security has traded at over the past year. It shows where today's price sits relative to recent history, not whether the security is cheap or expensive.

See also Volatility, Ticker symbol

Trying to beat the market by picking individual securities or timing trades. Active funds usually charge higher fees, and over long periods most have trailed their benchmark index.

See also Passive investing, Expense ratio, Index fund

Any cryptocurrency other than Bitcoin. The label covers thousands of tokens, from large networks like Ethereum to tiny, thinly traded coins that carry far higher risk.

See also Bitcoin, Ethereum, Rug pull

The yearly interest rate charged on borrowed money, quoted without the effect of compounding. On loans and mortgages it can also include certain fees, which makes it useful for comparing offers.

Example A credit card with a 24% APR charges roughly 2% interest per month on balances you carry.

See also APY, Interest rate, Compound interest

The yearly return on savings including the effect of compounding. Because it counts interest earned on interest, APY is slightly higher than the stated rate whenever interest is paid more than once a year.

Example A 4% rate compounded daily works out to an APY of about 4.08%.

See also APR, Compound interest

The lowest price a seller is currently willing to accept for a security. If you buy with a market order, you will usually pay around the ask.

See also Bid, Bid-ask spread, Market order

How you divide your portfolio among broad asset classes such as stocks, bonds and cash. It is one of the biggest drivers of both your long-run returns and how bumpy the ride feels.

Example A 70/30 portfolio holds 70% stocks and 30% bonds.

See also Diversification, Rebalancing, Risk tolerance

A decline of 20% or more from a recent peak in a market or index. Bear markets are painful but normal, and they have recurred throughout market history.

See also Bull market, Correction, Drawdown

The highest price a buyer is currently willing to pay for a security. If you sell with a market order, you will usually receive around the bid.

See also Ask, Bid-ask spread, Limit order

The gap between the bid and the ask. It is a hidden trading cost: heavily traded securities often have spreads of a penny, while thinly traded ones can have much wider spreads.

Example Bid $50.00 and ask $50.02 means a 2-cent spread.

See also Bid, Ask, Spread, Market maker

The first cryptocurrency, launched in 2009 by the pseudonymous Satoshi Nakamoto. Its supply is capped at 21 million coins, and its network is secured by proof of work.

See also Blockchain, Halving, Proof of work

A shared, append-only ledger kept by many computers at once. Transactions are grouped into blocks, and each block is cryptographically linked to the one before it, which makes past records extremely hard to alter.

See also Bitcoin, Ethereum, Smart contract

A large, well-established company with a long record of stable earnings, often a household name. Blue chips are generally steadier than smaller companies, but they can still fall sharply.

See also Large-cap, Stock, Dividend

A loan you make to a government or company. In return, the issuer typically pays you interest (the coupon) on a schedule and repays the face value when the bond matures.

Example Buy a $1,000 five-year bond with a 4% coupon and you collect $40 a year, then get your $1,000 back.

See also Coupon, Yield, Duration, Treasury

A firm licensed to buy and sell securities on your behalf. U.S. brokers are regulated by the SEC and overseen by FINRA; you can look up a broker's record on FINRA BrokerCheck.

See also Brokerage account, FINRA, SIPC

An investment account at a broker that lets you buy and sell stocks, bonds, ETFs and funds. A standard taxable brokerage account has no special tax breaks but also no withdrawal restrictions.

See also Broker, SIPC, Capital gains

A sustained period of rising prices, often defined as a gain of 20% or more from a recent low. Historically, bull markets have lasted considerably longer than bear markets.

See also Bear market, Correction

The profit from selling an investment for more than you paid for it. Gains are generally taxed only when you sell, which is called “realizing” them.

Example Buy shares for $1,000, sell them for $1,500, and you have a $500 capital gain.

See also Cost basis, Short-term vs. long-term capital gains, Tax-loss harvesting

Earning returns on your past returns, not just on the money you originally put in. Over long periods compounding makes growth accelerate, which is why time is an investor's most powerful ally.

Example $10,000 growing 7% a year becomes about $19,700 in 10 years and about $76,100 in 30.

See also Rule of 72, APY, Financial singularity

A decline of 10% to 20% from a recent peak. Corrections are a common, normal part of investing and have happened many times throughout market history.

See also Bear market, Drawdown, Volatility

What you paid for an investment, including certain costs such as commissions. Your taxable gain or loss is the sale price minus your cost basis, so keep good records.

See also Capital gains, Wash sale

The interest a bond pays, stated as an annual percentage of its face value. Many bonds, including U.S. Treasury notes and bonds, pay it in two installments a year.

Example A $1,000 bond with a 5% coupon pays $50 a year, often as two $25 payments.

See also Bond, Yield

A measure of the average change over time in prices that urban consumers pay for a basket of goods and services. Published monthly by the Bureau of Labor Statistics, it is the most widely watched U.S. inflation gauge.

See also Inflation, Purchasing power, Real return

The extra yield a riskier bond pays over a comparable Treasury. Widening spreads mean investors want more compensation for default risk, which often signals economic worry.

See also Bond, Treasury, Spread

A crypto account where a third party, usually an exchange, holds the private keys for you. It is convenient and offers account recovery, but you depend on that company's security and solvency.

See also Self-custody, Exchange, Private key

Financial services such as lending, borrowing and trading built on smart contracts instead of banks or brokers. DeFi is open to anyone with a wallet, but it carries risks including code bugs, hacks and few consumer protections.

See also Smart contract, Liquidity pool, Stablecoin

A sustained fall in the general price level, the opposite of inflation. It sounds pleasant, but persistent deflation can hurt an economy because people delay spending and debts become harder to repay.

See also Inflation, CPI, Recession

Spreading money across many investments so no single one can sink your portfolio. It reduces the risk tied to any one company, sector or country, though it cannot remove overall market risk.

Example One S&P 500 index fund spreads your money across roughly 500 companies instead of one.

See also Asset allocation, Index fund, Portfolio

A cash payment a company makes to its shareholders out of profits, usually quarterly in the U.S. Dividends are never guaranteed; a company can raise, cut or stop them.

See also Dividend yield, Stock, EPS

A stock's annual dividends per share divided by its share price. A very high yield can be a warning sign that the market expects the dividend to be cut.

Example A $100 stock paying $3 a year in dividends has a 3% dividend yield.

See also Dividend, Yield

Investing a fixed dollar amount on a regular schedule, regardless of price. You automatically buy more shares when prices are low and fewer when they are high, and you never have to time the market.

Example Investing $200 every payday into the same index fund, no matter what the headlines say.

See also Lump-sum investing, Volatility, Time horizon

A stock index of 30 large U.S. companies, first published in 1896. It is price-weighted, so higher-priced stocks move it more, which makes it a narrower gauge of the market than the S&P 500.

See also S&P 500, Nasdaq Composite, Index

The decline from an investment's peak value to its later low, usually shown as a percentage. Maximum drawdown, the worst such drop, is a blunt way to ask: how bad has it gotten before?

Example A portfolio that falls from $10,000 to $7,000 has had a 30% drawdown.

See also Volatility, Bear market, Correction

A measure, in years, of how sensitive a bond's price is to interest-rate changes. As a rule of thumb, a bond with a duration of 5 loses about 5% of its price if rates rise by one percentage point.

See also Bond, Yield, Interest rate

Cash set aside for unexpected costs such as a job loss, car repair or medical bill. A common guideline is three to six months of essential expenses, kept somewhere safe and easy to reach.

Example If your essentials cost $3,000 a month, a three-month fund is $9,000.

See also Liquidity, APY, FDIC

A company's profit divided by its number of shares outstanding. It shows how much profit belongs to each share and is the “E” in the P/E ratio.

Example $2 billion in profit across 1 billion shares is $2.00 of EPS.

See also P/E ratio, Stock, Dividend

A Singularity Securities concept: the point where withdrawing about 4% of your portfolio each year would cover your annual expenses. In practice, that is a portfolio worth roughly 25 times what you spend in a year.

Example Spend $40,000 a year and escape velocity is about $1,000,000 invested.

See also 4% rule, Financial singularity, Compound interest

A fund that holds a basket of investments and trades on an exchange like a stock throughout the day. Many ETFs track an index at very low cost.

Example An S&P 500 ETF lets you own a slice of about 500 companies with one purchase.

See also Index fund, Expense ratio, Mutual fund

A blockchain network, launched in 2015, that runs smart contracts: programs that execute automatically. Its native currency, ether (ETH), pays transaction fees. Ethereum moved from proof of work to proof of stake in 2022.

See also Smart contract, Gas fee, Proof of stake

A marketplace where buyers and sellers trade. Stock exchanges include the NYSE and Nasdaq. Crypto exchanges let you trade digital assets and often hold them for you, which makes them custodians too.

See also Broker, Custodial wallet, Liquidity

The annual fee a fund charges, expressed as a percentage of your investment and deducted automatically from the fund's returns. Small differences compound into large sums over decades.

Example A 0.50% expense ratio costs $50 a year for every $10,000 invested; a 0.05% ratio costs $5.

See also Index fund, ETF, Mutual fund

The U.S. agency that insures deposits at member banks. The standard coverage is $250,000 per depositor, per insured bank, for each ownership category. It does not cover stocks, bonds, funds or crypto.

See also SIPC, Emergency fund

A sentiment gauge scored from 0 (extreme fear) to 100 (extreme greed). The popular crypto version from alternative.me blends signals such as volatility, momentum, trading volume and social media activity.

See also FOMO, Volatility, VIX

The interest rate banks charge each other for overnight loans. The Federal Reserve sets a target range for it, and changes ripple out to savings yields, credit cards, mortgages and asset prices.

See also Federal Reserve, FOMC, Interest rate

The central bank of the United States, created in 1913. It sets monetary policy to pursue maximum employment and stable prices, supervises banks and acts as a lender of last resort.

See also FOMC, Fed funds rate, Inflation

A person or firm legally obligated to act in your best interest. When choosing a financial advisor, ask directly whether they act as a fiduciary at all times and exactly how they are paid.

See also Broker, FINRA, SEC

A Singularity Securities concept: the point where your portfolio's yearly growth overtakes what you contribute each year. Past it, compounding does more of the work than your paycheck.

Example Contribute $10,000 a year and, at 7% growth, you cross over once the portfolio passes about $143,000.

See also Compound interest, Escape velocity, Rule of 72

A self-regulatory organization, overseen by the SEC, that writes and enforces rules for U.S. broker-dealers. Its free BrokerCheck tool shows a broker's registration and disciplinary history.

See also SEC, Broker, SIPC

The Federal Reserve committee that sets U.S. monetary policy, including the target range for the fed funds rate. It holds eight scheduled meetings a year, and markets watch each decision closely.

See also Federal Reserve, Fed funds rate

The urge to buy something because its price is soaring and everyone seems to be getting rich. Acting on FOMO tends to mean buying after the big gains have already happened.

See also Loss aversion, Fear & Greed Index, Position sizing

The fee paid to process a transaction or run a smart contract on a blockchain such as Ethereum. Fees rise when the network is congested, and you can still owe them even if a transaction fails.

See also Ethereum, Smart contract, Slippage

The total value of goods and services an economy produces over a period. It is the broadest measure of economic output; two straight quarters of decline is a popular, though unofficial, recession signal.

See also Recession, Unemployment rate, Inflation

Shares of a company expected to grow revenue or earnings faster than average. Growth stocks often reinvest profits instead of paying dividends and tend to trade at higher P/E ratios, which can make them more volatile.

See also Value stock, P/E ratio, Volatility

A scheduled Bitcoin event, roughly every four years, that cuts in half the new coins awarded to miners for each block. It steadily slows the creation of new bitcoin toward the 21 million cap.

See also Bitcoin, Proof of work

Crypto slang for holding an asset through ups and downs instead of selling. It began as a misspelling of “hold” in a 2013 Bitcoin forum post and is often read as “hold on for dear life.”

See also Volatility, FOMO, Time horizon

A U.S. account for people with a qualifying high-deductible health plan. Contributions can be tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. The IRS sets annual limits.

See also IRA, 401(k)

A measuring stick for a slice of the market, built from a defined list of securities. You cannot invest in an index directly, only in funds that track it.

Example The S&P 500 index tracks about 500 large U.S. companies.

See also Index fund, S&P 500, Passive investing

A mutual fund or ETF that aims to match an index's performance by holding the same securities. Because it does not pay managers to pick stocks, it usually has very low fees.

See also ETF, Passive investing, Expense ratio

The general rise in prices over time, which means each dollar buys a little less. In the U.S. it is most often measured by the Consumer Price Index.

Example At 3% inflation, something that costs $100 today costs about $134 in 10 years.

See also CPI, Purchasing power, Real return

The price of borrowing money, expressed as a yearly percentage of the amount borrowed. Savers earn interest; borrowers pay it.

See also APR, APY, Fed funds rate

When short-term Treasury yields are higher than long-term yields. An inversion, especially between the 2-year and 10-year, has preceded many past U.S. recessions, but the lag has varied widely and it is not a guaranteed signal.

See also Yield curve, Recession, Treasury

A tax-advantaged U.S. retirement account you open yourself, separate from any employer plan. It comes in traditional and Roth versions, and the IRS sets annual contribution limits.

See also Roth IRA, Traditional IRA, 401(k)

A company with a large total stock market value, commonly defined as roughly $10 billion or more, though cutoffs vary. Large caps tend to be more established and less volatile than smaller companies.

See also Mid-cap, Small-cap, Market cap

Using borrowed money or derivatives to increase the size of a bet. Leverage magnifies gains and losses alike; with enough of it, a modest price move can wipe out an entire investment.

Example At 5x leverage, a 20% price drop erases 100% of your money.

See also Margin, Options, Short selling

An order to buy or sell only at a price you set or better. It protects you from paying more (or receiving less) than you intend, but it may never fill if the price does not reach your limit.

See also Market order, Stop order, Bid-ask spread

How quickly and cheaply something can be turned into cash without moving its price. Cash is perfectly liquid, large stocks are highly liquid and a house is fairly illiquid.

See also Emergency fund, Volume, Bid-ask spread

A pot of crypto tokens locked in a smart contract so people can trade against it on a decentralized exchange. Depositors earn a share of trading fees but face risks such as impermanent loss and hacks.

See also DeFi, Smart contract, Market maker

The tendency to feel the pain of a loss more strongly than the pleasure of an equal gain, described by psychologists Daniel Kahneman and Amos Tversky. It can push investors to panic-sell or cling to losers.

See also FOMO, Risk tolerance, Drawdown

Investing all available money at once instead of spreading it out over time. Because markets have historically risen more often than they have fallen, lump sums have usually, though not always, come out ahead.

See also Dollar-cost averaging, Time horizon

Borrowing money from your broker to buy investments, using your holdings as collateral. If your account value falls too far, you can face a margin call and be forced to add cash or sell at a loss.

See also Leverage, Brokerage account, Short selling

A company's total stock market value: share price times shares outstanding. It is how the market sizes up companies as large-, mid- or small-cap.

Example 1 billion shares at $50 each is a $50 billion market cap.

See also Large-cap, Share, S&P 500

A firm that continuously quotes prices to buy and sell a security and earns the spread between them. Market makers keep trading smooth by making sure someone is usually on the other side of your order.

See also Bid-ask spread, Liquidity, Volume

An order to buy or sell immediately at the best available price. It almost always fills, but the exact price is not guaranteed, which matters in fast-moving or thinly traded markets.

See also Limit order, Slippage, Bid-ask spread

A company with a medium total market value, commonly defined as roughly $2 billion to $10 billion, though cutoffs vary. Mid caps often blend some of the growth potential of small caps with more stability.

See also Large-cap, Small-cap, Market cap

A pooled investment that buys a portfolio of securities on behalf of many investors. Unlike ETFs, mutual fund shares trade once a day at the fund's closing net asset value (NAV).

See also ETF, Index fund, Expense ratio

An index of nearly all the stocks listed on the Nasdaq exchange, several thousand companies in all. It is heavily weighted toward technology, so it often swings more sharply than the broader market.

See also S&P 500, Dow Jones Industrial Average, Index

Everything you own (assets) minus everything you owe (liabilities). Tracking it over time is one of the clearest ways to see whether your financial life is moving in the right direction.

Example $40,000 in savings and investments minus a $15,000 car loan is a $25,000 net worth.

See also Emergency fund, Portfolio

A blockchain token that represents a unique item, such as a piece of digital art or an event ticket. Owning an NFT usually does not mean owning the copyright, and NFT markets have proven highly speculative.

See also Blockchain, Ethereum, Smart contract

Your investment return before adjusting for inflation: the number you see on your statement. Subtract inflation to find your real return, which tells you how much your purchasing power actually grew.

See also Real return, Inflation

Contracts giving the right, but not the obligation, to buy (a call) or sell (a put) an asset at a set price before a set date. Options can hedge risk or speculate, and many expire worthless.

See also Leverage, VIX, Short selling

A stock's price divided by its earnings per share. It shows how much investors pay for each dollar of profit; a high P/E usually reflects high growth expectations rather than a better company.

Example A $60 stock earning $3 per share has a P/E of 20.

See also EPS, Growth stock, Value stock

Practicing trades with virtual money instead of real money. It is a risk-free way to learn how orders, price swings and your own emotions work before you commit actual dollars.

See also Market order, Limit order, Position sizing

Buying and holding broad index funds instead of trying to pick winners or time the market. Its main advantages are low costs, wide diversification and fewer decisions to get wrong.

See also Active investing, Index fund, Expense ratio

A scam in which criminals pose as a trusted company or person, through emails, texts, fake websites or direct messages, to trick you into revealing passwords, login codes or a seed phrase.

See also Seed phrase, Private key, Rug pull

The full collection of investments you own across all your accounts. Thinking at the portfolio level, rather than one holding at a time, is how you manage your overall risk.

See also Asset allocation, Diversification, Rebalancing

Deciding how much of your portfolio to put into a single investment. Sizing each bet so a total loss would sting but not derail your plans is one of the simplest and strongest risk controls.

Example Capping any one speculative holding at 5% of a $20,000 portfolio limits it to $1,000.

See also Portfolio, Risk tolerance, Diversification

A secret number that proves ownership of a crypto wallet and authorizes its transactions. Anyone who has your private key can move your funds, so it must never be shared.

See also Seed phrase, Wallet, Self-custody

A way of securing a blockchain in which validators lock up (stake) coins for the right to propose and confirm blocks. Validators who cheat can lose part of their stake. Ethereum uses proof of stake.

See also Proof of work, Ethereum, Blockchain

A way of securing a blockchain in which miners compete to solve computational puzzles to add the next block. It uses a lot of electricity, which makes attacking the network very expensive. Bitcoin uses proof of work.

See also Proof of stake, Bitcoin, Halving

How much a unit of money can actually buy. Inflation erodes it: when prices rise 3% in a year, the same $100 buys about 3% less than it did.

See also Inflation, CPI, Real return

Your return after subtracting inflation, which measures how much your purchasing power actually grew. It is the number that matters for long-term goals.

Example Earn 7% in a year when inflation is 3% and your real return is about 4%.

See also Nominal return, Inflation, Purchasing power

Periodically buying and selling to bring your portfolio back to its target mix. It keeps your risk level steady and builds in a “trim what ran up, add to what fell” discipline.

Example A 60/40 target that drifts to 70/30 after a rally is rebalanced by shifting 10% from stocks back to bonds.

See also Asset allocation, Diversification, Portfolio

A significant, widespread decline in economic activity lasting more than a few months. In the U.S., the National Bureau of Economic Research (NBER) officially dates recessions, often well after they begin.

See also GDP, Unemployment rate, Inverted yield curve

How much volatility and loss you can handle, financially and emotionally, without abandoning your plan. It depends on your goals, income stability, time horizon and temperament.

See also Time horizon, Asset allocation, Volatility

An IRA funded with after-tax money. Qualified withdrawals in retirement, including all the growth, are tax-free. Income limits apply to direct contributions, and the IRS sets annual contribution limits.

See also Traditional IRA, IRA, 401(k)

A crypto scam in which a project's creators attract investors' money and then abandon the project, draining its liquidity or dumping their tokens and leaving the price near zero.

See also Altcoin, Liquidity pool, Phishing

A shortcut for estimating how long money takes to double: divide 72 by the annual growth rate. It works for inflation and debt, too.

Example At 8% a year, money doubles in about 9 years (72 ÷ 8 = 9).

See also Compound interest, Inflation

An index of about 500 of the largest U.S. public companies, weighted by market value. It covers roughly 80% of the value of the U.S. stock market and is the most common benchmark for “the market.”

See also Index, Index fund, Dow Jones Industrial Average

The U.S. federal agency that regulates securities markets, enforces securities laws and requires public companies to disclose financial information. Its free EDGAR database holds company filings.

See also FINRA, Broker, Fiduciary

A group of companies in the same broad line of business, such as technology, health care or energy. The widely used GICS system divides the stock market into 11 sectors.

See also Diversification, Stock, Index

A list of words, usually 12 or 24, that can restore a crypto wallet and every key in it. Anyone with your seed phrase controls your funds, and no legitimate company will ever ask for it.

See also Private key, Self-custody, Phishing

Holding your own crypto private keys, in a software or hardware wallet, instead of trusting an exchange. You gain full control, but if you lose your seed phrase, no one can recover your funds.

See also Custodial wallet, Seed phrase, Wallet

A single unit of ownership in a company or fund. Your slice of the company equals your shares divided by the total shares outstanding.

Example Own 10,000 shares of a company with 1 million shares outstanding and you own 1% of it.

See also Stock, Market cap, EPS

Borrowing shares and selling them, hoping to buy them back later at a lower price. Because a price can keep rising, potential losses on a short sale are theoretically unlimited.

See also Margin, Leverage, Options

In the U.S., gains on investments held one year or less are short-term and taxed as ordinary income. Gains on investments held more than one year are long-term and usually taxed at lower rates.

See also Capital gains, Cost basis, Tax-loss harvesting

A U.S. nonprofit that protects brokerage customers if their broker fails and assets go missing, up to $500,000, including $250,000 for cash. It does not protect against investment losses.

See also FDIC, Broker, Brokerage account

The difference between the price you expected and the price you actually got. It is most common with market orders in fast-moving or thinly traded markets.

See also Market order, Limit order, Bid-ask spread

A company with a small total market value, commonly defined as roughly $250 million to $2 billion, though cutoffs vary. Small caps can grow faster but tend to be more volatile.

See also Mid-cap, Large-cap, Market cap

A program stored on a blockchain that runs automatically when its conditions are met, such as releasing funds once a payment arrives. Smart contracts power DeFi, but bugs in their code can be exploited.

See also Ethereum, DeFi, Gas fee

The difference between two prices or rates. In trading it usually means the bid-ask spread; with bonds it can mean the extra yield over Treasuries; and the yield-curve spread compares long- and short-term rates.

See also Bid-ask spread, Credit spread, Yield curve

A cryptocurrency designed to hold a steady value, usually $1, typically backed by cash and short-term government debt or by other crypto. Its stability depends on the issuer's reserves and design; some have broken their peg.

See also DeFi, Altcoin, Exchange

Ownership in a company. Stockholders can benefit from the company's growth through a rising share price and dividends, but they can also lose their entire investment.

See also Share, Dividend, Market cap

An order that becomes a market order once a price you set, the stop price, is reached; it is often used to limit losses. In a fast-moving market, the fill can be well below your stop price.

See also Market order, Limit order, Slippage

Selling an investment at a loss to offset taxable gains and, within limits, ordinary income. You can reinvest in something similar, but watch the wash-sale rule.

See also Wash sale, Capital gains, Cost basis

A short code of letters that identifies a security on an exchange or a coin on a crypto platform.

Example AAPL is the ticker for Apple; BTC is the usual symbol for bitcoin.

See also Stock, Exchange

How long you expect to keep money invested before you need it. Longer horizons can generally tolerate more volatility, because there is more time to recover from downturns.

See also Risk tolerance, Asset allocation, Compound interest

An IRA in which contributions may be tax-deductible and investments grow tax-deferred; withdrawals in retirement are taxed as ordinary income. Withdrawals before retirement age can trigger penalties.

See also Roth IRA, IRA, 401(k)

Debt issued by the U.S. government: bills (a year or less), notes (2 to 10 years) and bonds (20 or 30 years). Backed by the full faith and credit of the United States, they are considered among the safest investments.

See also Bond, Yield curve, Yield

The share of the labor force that is jobless and actively looking for work. The U.S. rate is published monthly by the Bureau of Labor Statistics and is a key input to Federal Reserve decisions.

See also Recession, GDP, Federal Reserve

Shares that look inexpensive relative to fundamentals such as earnings, book value or dividends. Value stocks are often mature or out-of-favor companies; they can be bargains or cheap for good reason.

See also Growth stock, P/E ratio, Dividend yield

A measure of the stock market's expected volatility over the next 30 days, calculated from S&P 500 option prices. Nicknamed the “fear gauge,” it tends to spike when stocks fall sharply.

See also Volatility, Options, Fear & Greed Index

How much and how quickly an investment's price swings up and down. Higher volatility means a bumpier ride and a wider range of possible outcomes over short periods.

See also Drawdown, VIX, Risk tolerance

The number of shares or contracts traded during a period. Heavy volume signals strong interest and usually tighter spreads; unusually high volume often accompanies big news.

See also Liquidity, Bid-ask spread

Software or hardware that stores the keys controlling your cryptocurrency. The coins themselves live on the blockchain; the wallet holds the keys that let you move them.

See also Private key, Seed phrase, Custodial wallet

A U.S. tax rule that disallows a loss if you buy the same or a substantially identical security within 30 days before or after the sale. The disallowed loss is generally added to the new shares' cost basis.

See also Tax-loss harvesting, Cost basis

The income an investment produces, expressed as a percentage of its price. For bonds, yield moves opposite to price: when a bond's price falls, its yield rises.

Example A bond paying $50 a year that trades at $1,000 yields 5%; if its price drops to $900, the same $50 is a yield of about 5.6%.

See also Coupon, Bond, Dividend yield

A line plotting Treasury yields from short maturities to long ones. It normally slopes upward because lenders want more to tie money up longer; its shape offers clues about growth, inflation and Fed policy.

See also Inverted yield curve, Treasury, Spread