15 Common Investing Terms Every Student-Athlete Needs to Know

May 6, 2026

Investing

Learning the language of investing is just like learning all the plays or signals in sports. The game seems complex until you realize you can study the playbook and familiarize yourself with it.

The 15 Terms

Stock — A share of ownership in a company that entitles the holder to a portion of its profits and assets.

Bond — A loan made by an investor to a borrower (usually a company or government) that pays back with interest over time.

Dividend — A portion of a company's earnings paid out regularly to its shareholders.

Portfolio — The entire collection of investments held by an individual or institution.

Asset Allocation — The strategy of dividing investments among different asset categories like stocks, bonds, and cash.

Diversification — Spreading investments across different assets to reduce the risk of any single investment hurting your overall returns.

Index Fund — A type of fund designed to mirror the performance of a specific market index, like the S&P 500.

Compound Interest — The process of earning interest on both your original investment and the interest it has already generated.

Bull Market — A period of rising stock prices and a time of economic growth.

Bear Market — A period of declining stock prices and a time of economic decline.

Market Capitalization — The total market value of a company's outstanding shares.

P/E Ratio — A measure of a stock's price relative to its earnings per share, used to evaluate if it is over or undervalued.

Liquidity — How quickly and easily an asset can be converted into cash without significantly affecting its price.

ETF (Exchange-Traded Fund) — A basket of securities that trades on a stock exchange just like an individual stock.

Volatility — A measure of how dramatically an investment's price fluctuates over a given period of time.

Final Thoughts

You don't need to memorize all 15 today. Just like learning a new offense or defense, the more you study and use these terms, the more comfortable you'll get. Once these become second nature, the financial news, podcasts, and articles you read will start to actually make sense — and that's when you can start making smarter moves with your money.

Written by Matthew Park, LRF Intern & Contributor

15 Common Investing Terms Every Student-Athlete Needs to Know

The 15 Terms

Final Thoughts

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