← All Glossary Factor Investing An investment strategy targeting specific drivers of returns such as value, momentum, size, quality, and low volatility to construct diversified portfolios. Fair Market Value The price at which an asset would change hands between a willing buyer and willing seller in an arm's-length transaction, neither being under compulsion. FDIC (Federal Deposit Insurance Corp) A US government agency insuring deposits at member banks up to $250,000 per depositor, per account category, protecting consumers against bank failures. FHA Loan A mortgage insured by the Federal Housing Administration with lower down payment requirements (as low as 3.5%) and flexible credit guidelines for first-time homebuyers. Fiat Currency Government-issued currency not backed by a physical commodity like gold or silver, deriving its value from the issuing government's stability and trust. Fibonacci Retracement A technical analysis tool using horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) to identify potential support and resistance levels. FICA (Federal Insurance Contributions Act) A US payroll tax shared between employers and employees that funds Social Security and Medicare programs, totaling 15.3% of wages. Fiduciary A professional legally obligated to act in a client's best interest, putting the client's needs above their own, with higher standards than suitability-based advisors. Financial Independence (FI) The state of having sufficient passive income or savings to cover living expenses without needing active employment, a key goal in the FIRE movement. FINRA A self-regulatory organization overseeing US brokerage firms and registered representatives, enforcing rules on trading practices, disclosures, and investor protections. FIRE Movement Financial Independence, Retire Early — a lifestyle movement focused on aggressive saving (50-70%+ of income) and investing to achieve early retirement and financial freedom. Fixed-Rate Mortgage A home loan with an interest rate that remains constant throughout the loan term, providing predictable monthly payments regardless of market rate changes. Forex (Foreign Exchange) The global decentralized marketplace for trading national currencies, the largest and most liquid financial market in the world with daily volume exceeding $7 trillion. Forward Contract A customizable derivative agreement between two parties to buy or sell an asset at a specified future date and price, traded over-the-counter rather than on exchanges. Fundamental Analysis A method of evaluating securities by analyzing financial statements, management, industry conditions, and economic factors to determine intrinsic value. Future Value (FV) The value of a current asset at a specified future date based on an assumed growth rate, accounting for compounding of interest or investment returns. Futures Contract A standardized legal agreement to buy or sell a specific asset at a predetermined price at a specified future date, traded on regulated exchanges.
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