28
|
SAVING AND INVESTING
bonds or other assets. Funds are managed to meet certain objec-
tives. Some funds may seek to generate income on a regular basis,
for
instance, while others may seek to invest in companies that
are growing at a rapid pace. Funds usually charge annual manage-
ment fees
and may impose a sales charge, or load, on investors
when they buy or sell shares in the fund. So-called “no load”
funds impose no sales charge.
Principal
—
The total amount of money being borrowed or lent;
the initial amount of money invested.
Profit
—
Revenue
minus cost; money made on a transaction.
Purchasing Power
—
T
he amount of goods and services that can
be purchased by a given unit of currency after taking into account
the effect of inflation.
Real Return
—
The return that is earned
over a given time period
after subtracting taxes and accounting for inflation.
Risk
—
In finance, risk refers to the degree of uncertainty about
the rate of return on an asset and the potential harm that could
arise when financial returns are not what the investor expected. In
general, as
investment risks go up, investors seek higher returns to
compensate them for taking on such risks.
Risk Tolerance
—
An investor’s ability to
handle declines or
swings in the value of his or her portfolio.
Dostları ilə paylaş: