LEARN THE BASICS
MAY 2021
Investing terms 101
Don’t know your money market funds from your mutual funds? We’ve got you covered. Start your financial education with this handy glossary of investment terms. (Pro tip: Bookmark this page so you can refer back to it later!)
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Bonds and bond funds
These are also known as fixed-income securities, because the income they pay is fixed when the bond is sold. Bonds and bond funds invest in corporate or government debt obligations.
Commodities
These are physical commodities, such as an agricultural product (grains) or a natural resource (gold). A futures contract is an agreement to purchase or sell a commodity for delivery in the future.
Index funds
These funds invest in a particular stock market index, such as the S&P 500 or the Russell 2000. An index fund is managed passively and mirrors the performance of the designated stock or bond index.
Market-linked certificates of deposit (or structured CDs)
Returns are linked to the future performance of a market index, and may include stocks, bonds, foreign currency or other assets. These are designed for a long-term commitment (up to 20 years).
Money market funds
These are mutual funds that invest in short-term bonds. They usually pay better interest rates than a savings account but not as much as a certificate of deposit (CD).
Mutual funds
These invest in a variety of securities, which may include stocks, bonds, and money market securities. Costs and objectives vary.
Roth IRA
This is a personal savings plan for retirement where earnings that remain in the account are not taxed. Investments may include a variety of securities. Contributions are not tax deductible.
Stocks
Stocks represent a share of a company. As the company’s value rises or falls, so does the value of the stock. All Costco employees are eligible for the employee stock purchase plan, which allows you to purchase Costco stock through payroll deductions and eliminates brokerage fees through our partner, UBS Financial Services Inc.
Resources for you
- Get a free 30-minute financial consultation through Resources For Living® (RFL®)* on topics from investment strategies to creating a budget. To learn more, call 833-721-2320 (TTY: 711) or visit Costcobenefits.com.
- SmartDollar offers tools and information to help you learn more about investing and how to prepare for the future. Log in to your free SmartDollar account to access resources. Get started by visiting SmartDollar.com/enroll/Costco or text Costco to 33789.
- To learn more about your Costco 401(k) retirement plan — and saving and investing for retirement — log in to your account at RPS.TRowePrice.com. Visit the “Investments” page to review the investment options offered with your plan, including access to investment performance and fund fact sheets.
*Resources For Living is available to all employees and members of their household, including children up to age 26 living away from home.
- Get a free 30-minute financial consultation through Resources For Living® (RFL®)* on topics from investment strategies to creating a budget. To learn more, call 833-721-2320 (TTY: 711) or visit Costcobenefits.com.
- SmartDollar offers tools and information to help you learn more about investing and how to prepare for the future. Log in to your free SmartDollar account to access resources. Get started by visiting SmartDollar.com/enroll/Costco or text Costco to 33789.
- To learn more about your Costco 1165(e) retirement plan — and saving and investing for retirement — log in to your account at RPS.TRowePrice.com. Visit the “Investments” page to review the investment options offered with your plan, including access to investment performance and fund fact sheets.
*Resources For Living is available to all employees and members of their household, including children up to age 26 living away from home.
- Get a free 30-minute financial consultation through Resources For Living® (RFL®)* on topics from investment strategies to creating a budget. To learn more, call 833-721-2320 (TTY: 711) or visit Costcobenefits.com.
- SmartDollar offers tools and information to help you learn more about investing and how to prepare for the future. Log in to your free SmartDollar account to access resources. Get started by visiting SmartDollar.com/enroll/Costco or text Costco to 33789.
- To learn more about your Costco 401(K) retirement plan — and saving and investing for retirement — log in to your account at RPS.TRowePrice.com. Visit the “Investments” page to review the investment options offered with your plan, including access to investment performance and fund fact sheets.
*Resources For Living is available to all employees and members of their household, including children up to age 26 living away from home.