| Word |
Synonym / Acronym |
Definition |
| 12b-1 Fees |
|
Payments made by an investment company to an underwriter in connection with distribution and charged to the client through fund itself. |
| 3(c)(7) Funds |
|
Funds managed by investment advisors allowing fulcrum fees under the Investment Company Act of 1940 section 3(c)(7) for individuals having at least $5 million in investments and at least $25 million in other entities such as partnerships or corporations. |
| 401(k) Plan |
|
A defined contribution plan funded healvily by employee contributions and to a lesser degree by employer contributions based on vesting schedules and eligibility requirements. However, most such plans allow the employee to allocate investments. |
| 403(b) Plan |
Tax Sheltered Account (TSA) Tax Sheltered Annuity (TSA) |
An employer Sponsored Nonqualified Retirement Plan that may only be established by certain tax-exempt, nonprofit organizations, but similar to a 401(k). |
| 529 Plans |
|
An account allowing the investment of funds for anyone's (regardless of age) upper educational funding up to a maximum of $11,000 annually from each source. Contributions are NOT tax deductable, but withdrawals are tax-FREE when used for education. On 529 can have multiple beneficiaries. |
| Accounts Payable |
|
The amount owed for goods and services purchased on credit. |
| Accounts Receivable |
|
Money owed a company by customers who have purchased goods and have not yet paid. |
| Accredited Investor |
|
An financial institution or an individual having 1) at least $1 million in net worth OR 2) Gross income of $200,000 for each of the past two years with the anticipated continuation of this income level |
| Accrued Interest |
|
Interest accumulating on a loan that will be due at some point in time in the near future. |
| Accumulation & Distribution Area |
|
An area of realatively lateral movement in market or stock prices where sophisticated investors who forsee a breakout either buy or sell. |
| Accumulation Period |
|
The period of time during which an investor is putting money into an investment. |
| Accumulation Units |
Annuity Units |
A description of a segment of ownership of an annuity. Similar to shares for stocks or mutual funds. |
| Actual Contribution Percentage Test |
ACP Test |
A 401(k) discrimination test that compares the amounts that highly paid employees are contributing on an after-tax and matching contribution basis into the plan versus those contributions of lower-paid employees. |
| Actual Deferral Percentage Test |
ADP Test |
A 401(k) discrimination test that compares the amounts that highly paid employees are deferring into the plan versus those of lower-paid employees. |
| Adjusted Cost Basis |
|
A cost basis that changes duting the time the asset is held. |
| Administrator (re: securites regulation) |
Commissioner |
The official who monitors and administers a state's securites laws. |
| Advance-decline |
|
The number of stocks that have increased verses the number of stocks that have decreased for a given period. |
| Advertisement (as per Advisors Act) |
|
Any notice, circular, letter, or other written communication addressed to more than one person, or any notice in any publication or by radio or television which communicates anything to do with securities. |
| Advisory Compensation |
|
An amount received from any party for advisory service or consultation on whom to select an investment advisor whether or not it is paid directly by the client. |
| Affiliate (per: Inv. Comp. Act) |
|
Officer, director, partner, employee, investment advisor, advisory board member, or owner of 5% of a company. |
| Affiliated Company |
|
Company of which an investment company owns at least 5%. |
| After-Tax Yield |
|
A yield after taxes for a taxable investment comparable to the yield required in a tax free investment. (After-tax Yield) = (Taxable Yield) * (100% - Tax Bracket) |
| Agencies |
|
Securities issued by an agency of the U.S. Government. |
| Agent (re: securities) |
Registered Representative (RR) |
Any individual who represents a broker-dealer or issuer in effecting transactions in securities. |
| Aggressive Growth Fund |
|
A mutual fund whose main objective is rapid capital appreciation typically by investment in the most volital stocks. |
| Alpha |
Risk Adjusted Return |
The difference between the Security Market Line expected return and the actual return. |
| Alternative Minimum Tax |
AMT |
A calculation for federal taxation ensuring that taxpayers who benefit form special tax laws do not avoid income taxes altogether. |
| American Depositary Receipts |
ADR's |
A receipt for shares of the stock of a foreign company that have been deposited in a U.S. bank. The purpose of ADR's is to facilitate trading of foreign securities by eliminating the need to utilize foreign markets. |
| Annualized Return |
|
The total return of an investment over a one-year period. |
| Asset Allocation |
|
A mix or "allocation" of various investments or "assets" which are put together in a portfolio to maxmize risk verses return for an investors objectives and tolerances. |
| Asset Allocation Fund |
|
A mutual fund that invest in money-market instruments, common stock, and bonds, however, unlike balanced funds, the amount invested in these asset classes may drop to zero for a period of time. |
| At-The-Money |
On-The-Money |
The market price of the security for which an option is held equals the strike price. |
