Vocabulary Lesson
Learn 10 Essential Verbs Related to Investing
Invest
VERB - Basic
To put money into something, like a business or stocks, with the hope of making more money over time.
Many people invest in stocks to grow their savings over time.
Appreciate
VERB - Intermediate
To increase in value over time, such as a house or investment.
Investments in art can appreciate if the artist becomes famous.
Fluctuate
VERB - Intermediate
To rise and fall or change repeatedly, often in an unpredictable way.
Stock prices fluctuate daily based on news and economic reports.
Allocate
VERB - Intermediate
To decide where to put money or resources, often dividing them among different options.
Financial planners suggest that you allocate a portion of your cash to an emergency fund before investing.
Yield
VERB - Intermediate
To produce or generate money or profit from an investment, often shown as a percentage.
Savings accounts today rarely yield more than 2% interest per year.
Compound
VERB - Intermediate
To grow or increase in value as returns on an investment earn additional returns over time.
If you invest $1,000 at 5% interest, it will compound to over $1,600 in 10 years.
Diversify
VERB - Advanced
To spread money or resources across different types of investments to reduce risk.
Investors diversify their portfolios to lower the risk of losing money.
Hedge
VERB - Advanced
To reduce financial risk by using strategies or investments to offset potential losses.
To hedge against inflation, many investors buy real estate or gold.
Liquidate
VERB - Advanced
To sell something, like stocks or property, to turn it into cash.
In 2008, many banks had to liquidate assets during the financial crisis.
Speculate
VERB - Advanced
To buy or sell something based on predictions about future outcomes, often with significant risk.
Day traders speculate on short-term stock moves, buying low and selling high within hours.
