A to Z glossary
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Z
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10-K (An annual,
audited report on a publicly held company's operations and finances
that is filed with the Securities and Exchange
Commission.)
10-Q (A quarterly
report that public companies file with the Securities and Exchange
Commission, similar to the annual Form 10-K but less comprehensive
and generally not audited.)
12b-1 fee
(
An annual charge that mutual fund companies (including comapnies
that offer no-load funds) may impose on shareholders to cover
marketing and distribution costs.)
12 mo. EPS from
continuing operations (See fully diluted EPS from
continuing operations. )
12 mo. EPS from total
operations ( See fully diluted EPS from total operations.
)
13-D ( See form
13-D. )
200-day moving
average ( See moving average. )
30-year Treasury
Bill ( Known as "long bonds," 30-year Treasuries are the
longest-duration bonds issued by the federal
government.)
401(k) (A tax-deferred
employee retirement plan in which employers often match all or part
of employee contributions to the plan. )
403(b) (A tax-deferred
retirement plan, similar to a 401(k) plan, that is offered by some
nonprofit and public-sector employers. )
5% insider ownership
(%) (Percentage of shares owned by insiders and by
individuals or institutions that own 5 percent or more of the
company. )
50-day moving
average ( See moving average. )
52-week high
(
The highest price for a security or fund during the past 52 weeks.
)
52-week low
(
The lowest price for a security or fund during the past 52 weeks.
)
5-year earnings
growth ( See earnings growth. )
5-year high
(
The highest trading price for a security or fund during the past
five years. )
5-year low
(
The lowest trading price for a security or fund during the past
five years. )
8-K ( A form that
public companies must file with the Securities and Exchange
Commission to disclose material events that might affect financial
situation or stock price-for example, the resignation of a chief
executive officer. )
A
Absolute Breadth
Index (A market momentum indicator that measures volatility on
the New York Stock Exchange regardless of the direction prices are
headed. It is calculated by taking the absolute value of the
difference between NYSE Advancing Issues and Declining
Issues.)
accept ((Advanced
Account Register only) To permanently enter a transaction from an
online update into the account register after you review the
transaction and make any necessary edits.)
account
(A
group of transactions in Money for a single bank, brokerage,
retirement, loan, or credit card account. Accounts can also track
assets such as houses or vehicles, or investments that you want to
watch but do not own. See also watch account.)
account group
(A
way to define the purpose of one or more accounts in the Money
Lifetime Planner.)
account position
(The amount of your investment, either by owning stock
(a long position) or by owing stock (a short position). Also, the
amount open.)
account register
(The page in Money that displays all the transactions
for one account, such as a checking, a credit card, or an
investment account.)
accounts payable
(Current liabilities that are owed by you or your
business, generally for goods and services received. )
accounts receivable
(individual) (Amounts that you or your business are owed for goods
and services for which you have not yet been paid.)
accumulated
depreciation and depletion (The cumulative charges against the
fixed assets of a company for wear and tear, obsolescence, or the
depletion of a natural resource-for instance, oil in the ground-as
it is used up.)
accumulation and
distribution (A market momentum indicator that associates changes
in price with volume. The indicator is based on the premise that
price follows volume. The higher the volume that accompanies a
price move, the more significant the price move. )
acid-test ratio
(See quick ratio.)
actual earnings
(The actual Earnings Per Share (EPS) reported by a
company (in contrast to the EPS estimates predicted by
analysts).)
adjusted balance
(In
Money, the amount in your account after uncleared transactions,
such as outstanding checks, are processed by your bank.)
adjusted gross
income (On an individual income tax form, the total income
after deductions of certain items, such as retirement account
contributions, but before itemized deductions.)
adjustment
((Essential Account Register only) A payment or deposit
that has been made but hasn't yet cleared the bank. The adjusted
balance shows how much will be in your account after payments or
deposits clear the bank. )
ADR ( See American
Depositary Receipt (ADR).)
advance/decline
index ( A technical indicator that shows the total difference
between the number of advancing and declining security
prices.)
Advanced Account
Register (A version of the account register in Money that enables
you to track individual expenditures in detail. It can be updated
online or manually.)
Advanced Bills
(The Advanced Bills option in Money gives you more ways
to track and analyze your bills and deposits, including tracking
investment purchases, deposits, and paychecks; transferring funds
between accounts; specifying when a bill series ends; and editing a
single bill occurrence or a bill series.)
Advanced Budget
(The Advanced Budget option in Money gives you more
detail and long-term planning tools. You can break your expenses
into categories and subcategories, set up and access multiple
budgets, track irregular or one-time expenses, reallocate funds
from one budget category to another, and set savings goals.
)
Advanced Reports
(Advanced Reports in Money provide in-depth financial
reporting and customization, based on the information in your Money
file. Advanced Reports include account balance history, net worth
over time, and loan amortization.)
Advisor FYI
(Messages based on the information in your Money file
that alert you to recent changes or provide relevant financial
tips.)
advisory services
(
Privately circulated publications, generally sold by subscription,
that comment on the future course of financial markets and make buy
and sell recommendations.)
after hours
(
The sale of securities after regular business hours on organized
exchanges. Because fewer trades are made after hours, prices in
after-hours trading can be more volatile than they are during
regular trading hours, and a stock's opening price might be
different from the previous day's closing price. )
aggressive growth
fund (A mutual fund that focuses on stocks that have the
potential to rise sharply in value, often new issues or troubled
companies. Aggressive growth funds have both high potential returns
and above-average risk.)
all ordinaries
(A
benchmark index that tracks the performance of the Australian Stock
Exchange (ASX).)
alpha ( Measures the
difference between a fund's actual returns and its expected returns
given its risk level as measured by its beta. A positive alpha
figure indicates that the fund has outperformed its beta. A
negative alpha indicates that the fund has underperformed, given
the expectations established by the fund's beta.)
alternative minimum
tax (A tax designed to ensure that high-income taxpayers who
shelter their income with certain deductions-such as accelerated
depreciation, substantial itemized deductions, or tax-exempt
interest-pay at least a minimum amount of tax.)
American Depositary
Receipt (ADR) (American Depositary Receipts are tradable receipts
for shares of foreign companies on deposit at a bank. They are in
U.S. dollars on U.S. exchanges.)
American Stock Exchange
(Amex) (A stock exchange that generally lists smaller companies
than those listed on the New York Stock Exchange, as well as most
U.S.-registered exchange-traded funds (ETFs) and many equity and
index options.)
American-style
option (An option contract that may be exercised at any time
between the date of purchase and the expiration date. Most
exchange-traded options are American style.)
Amex (See American
Stock Exchange.)
Amex market value
(An
index that measures movements in all of the stocks listed on the
American Stock Exchange. It's less widely followed as the Dow Jones
Industrial Average or the Nasdaq Composite.)
amortization
(The gradual decrease in a value or balance over time.
For example, a loan balance is amortized as the borrower makes
payments of interest and principal. For tax purposes, amortization
of an intangible asset, such as start-up costs, spreads the expense
of the asset over a period of time.)
amortized loan
(A
debt that is repaid according to a schedule of regular payments
that include both interest and principal.)
Annual Percentage Rate
(APR) (Total interest cost on a loan or account, expressed as
a simple annual percentage.)
annualize
(
Convert to a yearly basis. If inflation is 1 percent in a given
month, it is about 12 percent on an annualized basis. Annualized
figures often ignore compounding.)
annual return
(
The annual profit on an investment as a percentage of the amount
invested. For example, a $1,000 investment that gives $100 in
profit, including capital gain, over the year has an annual return
of 10 percent.)
annuity
(A
contract between you and an insurance company in which you pay the
insurer a specified amount and, in return, receive regular payments
either for life or for a stated period of time. Annuity gains may
be tax-deferred.)
annuity, deferred
(An
annuity contract for people who want to save on a tax-deferred
basis for many years, then convert to a payout schedule after they
retire.)
annuity, immediate
(An
annuity with payouts that begin immediately after you purchase the
contract, generally when you are close to retirement.)
annuity, single
life (A pension that provides a regular payment every month
after you retire for the rest of your life, with payments based on
life expectancy. If the purchaser lives longer than actuarial
tables suggest, the payments continue and the annuity pays more in
total than expected. If the purchaser dies before the average age,
the remaining cash either reverts to the pension fund or-if the
pension fund permits-is paid in a lump sum to the purchaser's
estate. Sometimes called a straight-life annuity.)
annuity, split
(An
annuity contract with the principal investment split between a
deferred annuity and an immediate annuity. )
Apay (Automatic
payment. A type of electronic payment for which you set up the
payment amount and payment frequency only once, and the payment is
sent as scheduled until you cancel it. Monthly mortgage or rent
payments are good candidates for Apay because they are generally
the same amount every month.)
Annual Percentage Rate
(APR) (Total interest cost on a loan or account, expressed as
a simple annual percentage.)
appreciation
(The gain in market value over the cost of a security,
or the increase in the value of an asset.)
arbitrage
(An
investment technique that profits from differences in prices for
the same type of item, such as common stock shares, on two
different exchanges or markets when prices don't stay exactly in
sync. Arbitrageurs make money by buying at the lower price on one
market and quickly selling at the higher price on another market.
)
Arms Index
(A
market indicator that compares the number of stocks that increase
or decrease in price (advancing/declining issues) with the volume
associated with those stocks (up volume/down volume). Richard W.
Arms developed the Arms Index in 1967. Also referred to as Short
Term Trading Index, TRIN, MKDS, and STKS.)
archive
(To
copy your current Money file into a storage file and remove older
transactions from the current file. This helps keep your current
file to a manageable size.)
ask (The price at
which a holder of a security is willing to sell, as opposed to the
bid price, which is what someone has offered to pay.)
ask size
(The number of shares offered at the ask
price.)
asset (An item of
value that you own. Assets can be tracked in Money by using asset
accounts.)
assets (corporate)
(Anything of value owned by a corporation that, if sold,
could be used to offset debts.)
asset allocation
(The way in which an investment portfolio is divided
among different kinds of assets, such as stocks, bonds, or cash.
Proper asset allocations helps investors balance growth potential
and risk. )
asset allocation
fund (A mutual fund that invests in a wide variety of assets,
including domestic and foreign stocks, bonds, and money market
funds, to provide investment diversification to its
shareholders.)
asset class
(A
grouping of investments, based on the total market value of the
company or companies and on the type of investment (stock, bond,
cash, or other).)
asset turnover
(The ratio of sales to assets. Asset turnover helps
analysts compare how capital-intensive businesses are and how well
they use assets to produce revenue.)
associated cash
account (The cash portion of an investment account in which you
temporarily keep both cash for buying investments and the proceeds
from investment sales.)
Atlanta Fed Index
(A
regional survey that measures manufacturing activity in states such
as Georgia, Alabama, Florida, Tennessee, and Louisiana.)
at-the-market order
(See market order.)
at-the-money option
(An
option for which the underlying investment sells at the same price
as the strike price of the option.)
auto and truck
sales (A government report that tallies the monthly sales of
all domestically produced vehicles. It is considered an important
indicator of consumer demand.)
autobalance
(In
Money, a balance adjustment that is automatically entered into your
credit card account register when you pay your bill so that you can
keep your account register balance current without tracking
individual purchases.)
AutoComplete
(A
Money feature that automatically finishes filling in a name when
you begin to type one that you've used before. You can accept the
name Money suggests or finish typing a new name.)
average cost
(The total cost for all shares of an investment, divided
by the number of shares held.)
average credit
quality (A measure of the overall credit quality of a given bond
portfolio. The average credit quality is derived by taking the
weighted average of the credit rating for each bond in the
portfolio.
U.S. government bonds and bonds rated AAA are the safest. Bonds
rated BBB are the lowest bonds still considered investment grade.
Bonds rated BB or lower (often called junk bonds or high-yield
bonds) are more risky. Bonds in the NR/NA category are either not
rated by Standard & Poor's or Moody's or did not have a rating
available at the time of publication. )
average daily
volume (The total shares (or other units) of a security traded
during the current (or most recent) trading day.)
average maturity
(days) (The date on which a bond's principal must be repaid at
the face amount.)
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B
balance (of an
account) (In Money, the amount or value of an account as of a
specific date. In the Advanced Account Register, it is the total of
all the transactions in your account register; in the Essential
Account Register, it is the amount in your account according to
your bank the last time your account was updated
online.)
balance (to balance an
account) ((Advanced Account Register only) Verify that your bank
balance and your Money account balance agree, after verifying
transactions and making adjustments for items entered into Money
that haven't cleared your bank. )
balanced fund
(A
mutual fund that invests in a mix of stocks and bonds to provide
investment diversification to its shareholders.)
balance sheet
(A
financial statement that shows a company's assets, liabilities, and
owner's equity at a given point in time.)
balloon payment
(A
large final payment on a loan that pays off the loan's balance and
is much larger than the previous regular payments made on the
loan.)
bank balance
((Essential Account Register only) The amount in your
account, according to your bank or brokerage, as of the time the
account was last updated.)
bankruptcy
(Legal proceedings for adjusting the debts of an
individual or business that cannot meet obligations to creditors. A
Chapter 7 bankruptcy by a business liquidates the company to pay
off creditors; a Chapter 11 bankruptcy reorganizes the company and
enables the company to retain operating control while the company
restructures its debt. A Chapter 7 bankruptcy for an individual
liquidates the individual's assets (with some exceptions) to pay
off creditors; a Chapter 13 bankruptcy provides debt relief and a
structured program in which the individual agrees to make partial
payment to creditors. )
bar chart
(Displays a security's open, high, low, and closing
prices by using one vertical line for a specified time period. Bar
charts are the most popular type of security chart. The tick on the
left side of the bar is the opening price; the tick on the right
side is the closing price. The vertical length of the bar shows the
price range.)
base currency
(The currency used to record transactions within an
account or file.)
basis point
(One one-hundredth of a percent, often used to describe
changes in bond yields. For example, if a bond's yield drops from
6.56 percent to 6.51 percent, it has fallen by 5 basis
points.)
bear (Term for
someone who believes that the value of the stock market or equities
will fall.)
bearish spread
(An
option spread designed to be profitable if the underlying security
declines in price. A bearish debit spread involves purchasing a put
and selling a further out-of-the-money put. A bearish credit spread
involves selling a call and buying a further out-of-the-money
call.)
bear market
(A
prolonged downward trend in stock prices.)
bear trap
(A
situation in which a market that appears to be in decline rallies
unexpectedly. Investors who predict that the market will continue
to decline invest accordingly and are trapped when the market
continues to rally.)
Beige Book
(The Summary of Commentary on Current Economic
Conditions by Federal Reserve District. It is one of three
books prepared in advance of each Federal Open Market Committee
(FOMC) meeting and the only one that is released publicly. It tells
FOMC members about changes in the economy since the last FOMC
meeting.)
beneficiary
(A
person who receives a benefit, such as the income of a trust or
proceeds from an insurance policy.)
best-fit index
(The best-fit index is the most appropriate passively
managed collection of stocks against which to measure the
performance of a given mutual fund. The index also suggests the
role that a given fund might play in your portfolio.)
beta (A measure of
the sensitivity of a stock, bond, or fund to swings of an index or
the overall market. A beta of more than 1.0 indicates higher
volatility than the overall market. A beta of less than 1.0
indicates lower volatility than the overall market. )
bid (The price
someone has offered to pay for a security (as opposed to the ask
price, which is what the seller is willing to accept).)
bid size
(The number of shares a buyer is willing to buy at the
bid price. )
bid tick
(Indicates whether the current bid is higher, lower, or
the same as the previous bid. )
Big Board
(See New York Stock Exchange. )
bill payment
provider (An online service provider that enables you to pay
bills electronically, either directly from Money or on the
provider's Web site.)
blue chip
(Generally, stocks of large, established companies that
are considered relatively safe.)
Bollinger bands
(A
technical indicator that charts a stock price's standard deviations
above and below a moving average, used to find unusual price
movements. )
bond (An IOU from a
government (national or local) or a corporation, promising to repay
a given amount by a given date. )
bond rating
(A
grade on creditworthiness given to a bond by one of the big rating
agencies, such as Moody's or Standard & Poor's. Because bonds
with high ratings are considered less risky than bonds with lower
ratings, highly rated bonds usually pay lower interest.)
book value
(The net worth of a company according to its books, or
the amount by which the company's assets exceed its liabilities.
Also known as "shareholder's equity." Most companies are worth much
more than their book value.)
book value/share
(The net worth of a company during its most recent
quarter divided by the latest shares outstanding. The book
value/share ratio estimates how much each share would be worth if
the company were liquidated.)
breakout
(When a stock trades in a narrow range for some time and
then advances above the resistance level, it is said to have an
upside breakout. Breakouts are suspect if they do not occur on
comparatively high volume.)
brokerage account
(The investments that a brokerage company holds for you.
In Money, each of your brokerage accounts should be set up as a
separate investment account. )
brokerage
availability (Lists brokerage firms that offer the fund through
their mutual fund program. If "NTF" (No Transaction Fee) appears
after the broker name, it means that the broker does not usually
charge a commission for funds in this program.)
brokered CD
(A
Certificate of Deposit (CD) that is purchased through a brokerage
rather than a bank. Brokered CDs are more liquid than bank CDs,
have no penalty for selling prior to maturity, often pay more
competitive rates, and are still insured by the Federal Deposit
Insurance Corporation for up to $100,000. )
bucket shops
(Hard-sell telemarketing operations that push securities
or financial services.)
bull (Term for
someone who believes that the value of the stock market will rise
or that prices will rise in a market sector or for a specific
security.)
bull/bear ratio
(A
market sentiment indicator that is based on a weekly poll of
investment advisors asking if they are bullish, bearish, or neutral
on the stock market. )
bullish spread
(An
option spread designed to be profitable if the underlying security
rises in price. In a bullish debit spread, the investor purchases a
call and sells a further out-of-the-money call. In a bullish credit
spread, the investor sells a put and buys a further
out-of-the-money put.)
bull market
(A
prolonged upward trend in stock prices.)
bull trap
(A
situation in which a market that appears to be rising unexpectedly
goes into decline. Investors who predict that the market will
continue to rise invest accordingly and are then trapped when the
bull market fails.)
buyers (Total number
of institutional owners who increased their positions and the
aggregate number of shares added to their positions.)
buy on margin
(The practice of buying stock with money borrowed from a
broker. The loan is secured by the security, which is held in a
margin account. The broker charges interest on the
loan.)
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C
call (An option that
grants the right to buy a given stock at a given price (the strike
price) during a given period of time. The call holder profits if
the market price rises higher than the strike price. )
callable bond
(A
bond that can be retired, or "called in," by the issuer before the
bond matures. The power to call a bond gives companies a way to
respond to falling interest rates. Callable bonds often pay higher
rates than noncallable bonds.)
called away
(Term used when the seller of a covered call or put
option is obligated to surrender the underlying stock to the option
buyer. The price of the surrender is the strike price of the option
sold. The term is also used when a bond is redeemed, or called,
before maturity.)
candlestick chart
(Chart that displays the high, low, opening, and closing
prices of a security for each period. The high and low are shown by
a vertical line, and the open and close are shown by a rectangle (a
black rectangle if the price fell, white if it went
up).)
capacity
utilization (The Federal Reserve's measure of manufacturing
growth, which is used to gauge inflationary pressure. The capacity
utilization rate is provided as part of the government's Industrial
Production Index, a fixed-weight measure of the physical output of
the nation's factories, mines, and utilities.)
capital expenditure
(Purchase or upgrade of physical assets that generally
have a long useful life. )
capital gain
(Profit on the sale of stocks, bonds, mutual funds, or
capital assets. Capital gains usually receive favorable tax
treatment compared to other forms of income.)
capital gains
distribution (Profits from a mutual fund's sale of investments.
The profits are passed along to shareholders.)
capital loss
(Loss from the sale of stocks, bonds, mutual funds, or
capital assets. For tax purposes, capital losses may be used to
offset capital gains or limited amounts of other
income.)
capital spending
(See capital expenditure.)
cash and
equivalents (An asset category on a company's balance sheet that
includes bank balances, currency and coins, and assets such as
certificates of deposit or bonds that can quickly be converted into
cash.)
cash at beginning of
period (The amount of cash and cash equivalents at the
beginning of a fiscal period.)
cash flow
(business) (Deposits into and withdrawals from your business
accounts, which you can find in the monthly cash flow report in the
Reports area.)
cash flow review
(A
chart that forecasts future daily balances in one or more accounts,
calculated from current balances, scheduled bills and deposits, and
trends from past transactions or budget amounts.)
cash transaction
register (The money market fund associated with an investment
account and used to store proceeds from investment sales until you
buy other investments. In Money, the Cash Transactions register is
a part of your investment account unless you choose not to track
the cash in your account.)
casualty
(
Damage to or destruction of property resulting from a sudden and
unexpected event.)
category
(A
group of income and expense transactions, used to track income and
spending in Money reports.)
category average
return (Average returns of all mutual funds in a particular
category, useful for comparing one fund to comparable
funds.)
Certificate of Deposit
(CD) (Bank, credit union, or savings-and-loan instruments
that enable you to lock in an interest rate for a specific period
of time.)
chain store sales
(A
private survey that tracks a representative sample of retailers to
measure their sales on a weekly basis.)
change (The difference
between the preceding day's closing price for a security and the
most recent price. Note: Prices are usually delayed by at least 20
minutes.)
Chart of Accounts
(List of your business accounts and categories in Money.
Accounts are listed as assets or liabilities. Categories are listed
as income or expense.)
Chicago Board Options
Exchange (CBOE) (A financial market where traders buy
and sell standardized option contracts, including stock, currency,
and index options.)
churning
(An
unethical practice used by some brokers in which they repeatedly
buy and sell in their clients' accounts for the sole purpose of
generating commissions.)
class ((Advanced
Account Register only) A higher level of categorization for income
and expenses. You can create classifications for family members,
properties, projects, hobbies, or other logical
groupings.)
Class B shares
((Mutual funds) Mutual fund shares that usually have a
back-end load, generally one based on the length of time that the
shares have been held.)
class of options
(Option contracts of the same type (put or call) and
style (American or European) that cover the same underlying
security.)
cleared transaction
(A
transaction that has been processed by your bank or brokerage and
that is reflected in your account balance.)
close (The final
trading price for a security or fund at the end of the most recent
trading day.)
closed-end fund
(A
mutual fund that issues a fixed number of total shares. Shares are
traded from investor to investor on an exchange instead of being
sold by the issuing company, and the share price changes based on
supply and demand.)
closed to new
investors (A fund that is not issuing new shares, usually to avoid
becoming too large.)
commission
(A
fee that a broker charges a client for buying or selling a
security. The commission is usually based on the number of shares
or the total value of the transaction.)
commodity
(A
generic item-such as copper, oil, wheat, or cocoa-that can be
bought and sold by investors on a commodity exchange. )
Commodity Futures
Trading Commission (CFTC) (The regulatory body that oversees
the markets where commodity futures and options are
traded.)
common stock
(The most widespread form of stock ownership. Common
stock holders can typically vote for a company's board of directors
and can buy or sell stock shares, but they are last in line (behind
creditors, bond holders, and preferred stock holders) for
dividends, asset distributions, and other benefits.)
common stock equity
(A
company's net worth-that is, the difference between assets and
liabilities on the company's balance sheet. )
company name
(The name of the organization that issued a
security.)
composition
(A
breakdown of a mutual fund's assets by investment class, such as
stocks, bonds, cash, or other. The "other" category includes
preferred stocks, as well as convertible bonds and convertible
preferreds.)
concentration risk
(The risk you take when you put all of your money into
one kind of investment, such as a stock, your home, or your
business.)
conglomerate
(A
corporation that consists of many companies that are engaged in a
variety of businesses.)
consensus EPS trend
(A
graph that shows changes over time in analysts' consensus estimates
for a company's earnings per share (EPS).)
consensus estimate
(A
company's average Earnings Per Share (EPS) estimate according to
top analysts.)
consolidated balance
sheet (A balance sheet that combines the assets and
liabilities of the various subsidiaries of a firm into a single
snapshot. Most balance sheets for large firms are
consolidated.)
constant ratio
investing (An investing strategy in which investors adjust their
portfolios on a regular basis to keep the ratio of stocks and bonds
constant.)
construction
spending (A government report that breaks down spending on new
construction by residential, nonresidential, and public
construction.)
consumer confidence
(A
government survey that measures consumer optimism or pessimism
about current and future economic conditions.)
Consumer Credit
Report (A government report issued by the Federal Reserve that
measures consumer debt in three categories: auto loans, revolving
loans, and credit card debt. )
consumer durables
sector (A category that includes auto, housewares,
recreation/luxury, and multi-industry companies.)
consumer price
index (A measure of changes in the price of products typically
bought by consumers, used as one indicator of inflation. Also known
as the cost-of-living index.)
consumer sentiment
index (An index that combines the current and expected levels
of consumer confidence. It is released two times a month, first as
a preliminary reading and then as a final reading. )
consumer staples
sector (A category that includes food, beverages, tobacco, and
household goods companies.)
contingent deferred
sales load (An "exit fee" that some mutual funds charge to
customers who sell their shares within five or six years of making
their investment. Such funds may call themselves no-load funds even
though investors have to pay a load if they sell early.)
contract size of an
equity option (The amount of the underlying asset that is covered
by an options contract. The standard is 100 shares for one option
contract unless adjusted for a special event, such as a stock split
or a stock dividend.)
contrarian
(An
investor who does the opposite of what most other investors are
doing at any given time, such as investing in out-of-favor market
sectors or selling stocks that analysts encourage investors to
buy.)
convertible
security (A security that can be converted into some other kind
of security. Typically this means a species of bond that can be
converted into common stock at a given price at the option of the
holder, who would make the conversion if the common shares rise
above this price. )
cop/lease sector
(A
category that involves certificates of participation and
leases.)
corporate bonds
(Bonds issued by private corporations rather than by
governments.)
correction
(A
sharp, short drop in stock prices, after which the market resumes
an upward climb.)
correlation
(A
measure of how closely two variables move together through time.
For example, all utility stocks tend to have a high degree of
correlation because the same forces influence their share prices.
)
cost basis
(The amount invested in a given security or portfolio,
calculated by multiplying the share price by the number of shares,
plus any commission. This figure is used to determine your
investment return and to calculate taxes when you sell the
investment.)
cost of sales
(The cost of producing a firm's products, including the
costs of materials, labor, and overhead, but excluding costs such
as depreciation, taxes, and interest.)
Council of Economic
Advisors (CEA) (A three-person panel appointed by
the president of the United States to advise on economic
issues.)
coverage ratio
(The ratio of earnings to some given expense, such as
interest or dividends paid. For example, if a company is earning
less than its dividend payout, its coverage ratio is less than
one.)
covered call
(A
form of option writing or selling in which the seller owns a
quantity of the underlying security equivalent to the number of
shares represented by the option contracts sold. A covered call
position is less risky than an outright long stock position and is
equivalent in its profit/loss profile to selling naked
puts.)
CPI-Indexed Treasury
Notes (TIPS) (A series of inflation-adjusted 10-year notes first
issued by the U.S. Treasury in 1997.
The 10-year notes help protect investors from inflation by linking
the principal payment to the consumer price index (CPI), a commonly
used measure of inflation. Each year, the principal increases by
the percentage that the CPI increased for the prior year. The
interest rate is constant over 10 years, but the interest payment
increases as the principal does. Investors realize the increase in
principal when the note matures.)
credit rating
(Ranking of your status as a potential credit risk,
based on analysis of your previous and current debt (including
credit cards, student loans, and other debt) and your record of
repayment.)
credit report
(Report of your credit rating and credit history. A
credit report may be ordered by potential creditors, landlords, or
other parties. )
credit risk
(The chance that a borrower won't repay what is owed.
)
credit spread
(The spread between Treasury securities and non-Treasury
securities that are identical in all respects except quality
rating.
Credit spread also refers to an investment strategy in which the
investor receives a net credit amount when the spread is initiated.
For example, in a bullish credit spread, an investor sells a
high-premium, out-of-the-money put and buys a low-premium, further
out-of-the-money put on the same underlying security. )
currency
(The units in which prices are quoted, such as U.S.
dollars, British pounds, or Japanese yen.)
currency hedging
(A
tool used to protect against the risks posed by worldwide currency
fluctuations and to lock in an exchange rate by taking out a
foreign futures contract (a hedge). )
currency risk
(The risk to investments, such as foreign stocks or
U.S.-based mutual fund companies that invest in overseas companies,
from fluctuating worldwide exchange rates.)
current assets
(Cash, accounts receivable, inventory, and other assets
that are likely to be converted into cash within a
year.)
current dividend
yield (The dividend yield for a security is reported as the
amount of its current per-share dividend, divided by the share
price.)
current (last)
price (The current trading price of one unit of a particular
security. Note: Prices are usually delayed by at least 20
minutes.)
current liabilities
(Debts or other obligations coming due within a
year.)
current offer
(The price at which the owner of a security offers to
sell it.)
current ratio
(Current assets divided by current liabilities from the
most recent quarter. The current ratio is a measure of a firm's
immediate financial health and its ability to meet current
obligations.)
current yield
(The return on an investment (from dividends, interest
payments, or capital gains distributions) as a percentage of the
current price of the investment.)
custodial account
(An
account set up with a bank or securities company in a child's or
other dependent's name.)
cyclical stock
(A
stock whose price tends to rise when the economy is entering an
upswing and fall as the economy begins to decline.)
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D
daily volume (13-week
average) ( The average number of shares of a company's stock that
have been traded daily over the previous 13-week period. Daily
volume is an indicator of a security's liquidity. )
DAX ( A benchmark
index that tracks 30 blue chip stocks traded on the Frankfurt Stock
Exchange in Germany. )
day's high
(The highest price of a security during the current
day's trading.)
day's low
(The lowest price of a security during the current day's
trading.)
day trader
(Someone who makes short-term investments in securities,
commonly buying and selling a security on the same day.
)
debenture
( A
bond issued without specific security. Debentures usually pay
higher interest rates because, in the event of a crisis, holders of
these securities take a back seat to other bondholders.
)
debit spread
( A
strategy in which an investor buys a call (put) and sells a further
out-of-the-money call (put) to create a spread with an initial
debit in the investor's account. )
debt (Money owed to
another person or company, such as loans, credit card balances, or
mortgages. )
debt consolidation
loan (Loan offered as a way of paying off other debts,
usually at a lower interest rate than the original debts. It has
the advantage of requiring only a single monthly
payment.)
debt/equity ratio
(The long-term debt reported in the most recent quarter,
divided by the common stock equity of the most recent quarter.
)
debt guidelines
(When you apply for a home mortgage, income or debt
guidelines used to estimate the maximum loan you can get based on
the amount of your anticipated mortgage debt and the consumer debt
you already have (such as credit cards or car loans). )
debt ratio
(Total liabilities divided by total assets. The debt
ratio is an indicator of the extent to which a business is
leveraged. )
Debt Reduction
Planner (A tool in Money that enables you to create an efficient
plan to pay off high-interest debt and determine how quickly you
can do it.)
debt securities
(A
security that represents borrowed funds, such as bonds.
)
decrease/increase in
other current liabilities ( The change over time of the "other
current liabilities," a category that includes all current
liabilities that are not included in short-term debt. )
decrease/increase in
payables ( The change over time in accounts payable. )
deduction
(Amount that a taxpayer can subtract from income before
calculating income tax liability. Deductions are based on specified
expenses, such as mortgage interest expenses or property taxes, or
a deduction can a standardized amount, such as the standard
deduction.)
deferred income
taxes (Future taxes due on current income, based on the
difference between income calculated for tax accounting and for
regular accounting as presented to investors. )
deferred sales
charge ( A fee charged when you sell mutual fund shares,
instead of when you buy them. Also known as a back-end load.
)
delta ( A measure of
how movements in a stock's price affect the price of an option
based on the stock. A delta of .25, for example, means that when a
stock rises by $1, the option price rises by 25 cents. Call options
have a positive delta, and puts have a negative delta. )
demand sector
( A
category that includes short-term municipal securities.
)
depreciation and
amortization (A balance sheet item that reduces the value of
assets because of wear, age, or obsolescence, or that amortizes a
cost over a period of years, such as the expenses for leased
property, intangibles, goodwill, and depletion. )
derivative
instrument (Investments that are derived from something else. An
options is a derivative, for instance, because there is an
underlying stock, commodity, or other asset on which its price is
based. )
difference in
earnings ( The difference in Earnings Per Share (EPS) between
what analysts predicted for a company and what the company actually
reported. )
dilution
( A
"watering down" in the ownership stake represented by a single
share of stock, usually as a result of the sale of additional
shares. )
direct debit
(A
withdrawal transaction, such as an annual fee, that is subtracted
directly from your account with your permission.)
direct deposit
(A
deposit that is made directly to your account by someone else, such
as your employer or a brokerage company.)
direct financial
services (Services provided by your financial institution that
enable customers to do common banking tasks from a computer through
a direct connection with the financial institution's computers.
)
direct purchase
plan ( Investment plan that permits any investor, even one
who does not already own a company's stock, to buy stock directly
from the company itself without paying a broker's sales commission.
)
direct statements
(A
direct financial service that enables you to download online
statements directly from your financial institution. )
discretionary
category (A budget category that you can control on a monthly
basis, such as recreation or dining out.)
distribution
(Payout of funds from a retirement plan, such as an IRA
or 401(k). Also, payout of cash or property from a corporation to
shareholders (including dividends, stock redemptions, and other
corporate transactions).)
diversification
(
An investing strategy that attempts to minimize risk by investing
in different types of investments. )
Diversified emerging
markets ( A Morningstar category for international equity funds
that have at least 50 percent of their stock holdings invested in
emerging markets and 40 percent of equity holdings in foreign
stocks. )
Diversified Pacific
Asia ( A Morningstar category for international equity funds
that have at least 65 percent of their stock holdings in Pacific
countries/regions and at least 10 percent more invested in Japan.
)
dividend
(A
distribution of corporate earnings to shareholders, usually on a
quarterly basis.)
dividend coverage
( A
comparison of earnings and dividend payout to see whether a company
has enough money coming in to cover what it pays to shareholders.
)
dividend growth
(
The compound annual growth rate of dividends per share.
)
dividends paid per
share (The cash payment per share made by a company to its
shareholders. )
dividend payout
(
See payout ratio. )
dividend rate
(
The periodic amount of the dividend per share. )
Dividend Reinvestment
Plan (DRIP) ( A system in which dividends on a stock are
automatically reinvested in additional shares of stock, usually
without a fee and sometimes even at a discount. )
dividend yield
( A
stock's dividend expressed as a percentage of the share price. A
high dividend yield may indicate that a stock is undervalued or
that dividends may be cut. )
dividend yield (5-year
average) ( The sum of the past five fiscal year-end dividend
yields divided by 5. )
dollar ( The name of a
unit of currency used by several countries, including the United
States, Canada, Australia, New Zealand, and Singapore. )
dollar cost
averaging (An investment technique in which you invest the same
amount of money in stocks each month, quarter, or year. With this
technique, you automatically purchase more shares when the price is
lower and fewer shares when the price is higher.)
domestic hybrid
( A
Morningstar category for domestic equity funds that have stock
holdings of greater than 20 percent but less than 70 percent of
their total portfolio. )
domestic stock fund
( A
mutual fund that invests mainly in stocks of U.S. companies,
including companies that do business overseas. )
double bottom
(
For technicians, this is when a stock falls, bounces back, falls
again to the same level, and then rebounds once more, creating a
graph that looks somewhat like the letter W. The twice-touched low
is considered a support level. )
double top
(
For technicians, this is when a stock rises to a given high level
twice, with a drop in between, creating a graph that looks somewhat
like the letter M. The high level may indicate a ceiling for the
stock's price. )
Dow industrials
(
See Dow Jones Industrial Average. )
Dow Jones Industrial
Average (An index that reflects the prices of 30 U.S. stocks. It
is one of the most widely watched indicators of U.S. stock market
movements.)
Dow Jones
membership ( Inclusion in the Dow Jones Industrial Average.
)
Dow Jones
Transportation Average (An index that reflects the prices of
20 stocks in the transportation sector of the economy. These
include trucking companies, railroads, airlines, and package
delivery companies such as FedEx and United Parcel
Service.)
Dow Jones Utilities
Average (An index that reflects the prices of 15 electric and
gas utility companies.)
Dow Jones Wilshire 5000
Composite Index (See Wilshire 5000 Stock
Index)
DRIP ( See Dividend
Reinvestment Plan (DRIP). )
durable goods order
( A
government index that measures the dollar volume of orders,
shipments, and unfilled orders of durable goods (defined as goods
whose intended life span is three years or more). Orders are
considered a leading indicator of manufacturing activity.
)
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E
earnings
( A
company's net income from operations during the most recent four
quarters. Earnings can be reported as actual earnings, operating
earnings (from ongoing businesses only), or pro forma earnings
(which adjust for changes in the company's business activities,
such as mergers or closed businesses). )
earnings date
(The date on which a company's earnings will next be
reported.)
earnings estimates
(Analysts' estimates for earnings per share.
)
earnings growth
(
The percent change in earnings for a company over an actual or a
projected time period. )
earnings multiple
(
See price/earnings ratio. )
earnings per share
(EPS) ( A company's net income divided by common shares
outstanding. EPS is a measure used as the basis for many
calculations that are used to assess whether a stock is overpriced
or underpriced. )
earnings surprise
(
The difference between what analysts expected a company to earn and
what was actually earned, sometimes expressed as a
percentage.)
EBIT ( Earnings
before interest and taxes. This is the figure for operating income
after depreciation, but but it doesn't allow for debt service or
what is owed to the government for taxes. )
EBITDA ( Earnings
before interest, taxes, depreciation, and amortization.
)
Edgar (The Electronic
Data Gathering, Analysis, and Retrieval system used by the
Securities and Exchange Commission to electronically recieve and
disseminate corporate filings. )
Education sector
(A
sector of the economy that includes colleges and universities,
independent and unified school districts, student loans, and
tuition companies. )
effective tax rate
(The percentage of your total taxable income that you
pay in income tax. Your effective rate is is less than the rate in
your tax bracket, or your marginal rate. )
effect of exchange rate
changes ( Includes any gains or losses from the translation from
foreign currency to U.S. dollars. )
Elliott wave theory
(Ralph Nelson Elliot's theory that movements in the
stock market can be predicted by identifying repetitive patterns of
waves by using price charts. The underlying premise of the Elliott
Wave Theory is that of building up and tearing down. He concluded
that there are five price-change waves in the direction of the main
trend followed by three corrective waves, often referred to as a
"5-3" move. )
emerging-markets
bond ( A Morningstar category for taxable bond funds that
invest at least 75 percent of their assets in emerging-markets
bonds based on holdings for the last three years. These bonds can
be of any duration or maturity. )
emerging markets
fund ( An international mutual fund that invests in
developing countries/regions, such as those in Southeast Asia and
Eastern Europe. )
employees
(
The number of employees as indicated on a company's latest 10-K or
10-Q. )
employee stock option
grant (A form of compensation in which an employer gives an
employee the right to buy a specific amount of the company's stock
at a specific price (the strike price). )
employee stock purchase
plan (ESPP) ( A plan that enables employees to purchase company
stock at a discount to the fair market value. )
employment report
( A
government survey that measures unemployment levels and nonfarm
payrolls. It is the most timely and broad indicator of economic
activity that is released each month. )
encryption
(An
electronic process for scrambling data into an unreadable format so
that outside parties cannot read it. When the data is received by
the appropriate party, it is unscrambled.)
Energy sector
( A
category that includes oil and natural-gas companies. )
entry level
(
Jargon term used by analysts to specify the recommended price at
which to purchase a security. )
Epay (Electronic
payment. An arrangement with your bank or brokerage to have funds
withdrawn from your account and sent to a payee. You can set up
Epays in Money.)
EPS ( See earnings
per share (EPS). )
EPS (latest 12
months) ( The sum of the last four quarters of earnings per
share. )
EPS (1-year growth
rate) ( The year-to-date percent change in earnings per share
versus the same period a year ago. )
EPS (5-year growth
rate) ( The compound annual growth rate of earnings per share
over 5 years. )
EPS estimate
(
The average prediction of a company's earnings per share (EPS) for
a quarter or year, made by the analysts that cover the company.
)
EPS growth next
year ( The estimated growth of earnings per share for the
next year, calculated by using the following formula:
1 – (estimate for the next year/estimate for current year).
)
EPS growth quarter vs.
quarter ( The percent change between the current quarter's
earnings per share (EPS) versus the same quarter one year ago.
)
EPS growth year vs.
year ( The percent change between annual earnings per share
(EPS) versus EPS one year ago. )
EPS growth YTD vs.
YTD ( The percent change between the current year-to-date
earnings per share (EPS) versus the year-to-date EPS figure of one
year ago. )
EPS percent change
(
The percent difference between the latest fiscal year earnings per
share (EPS) from total operations and the EPS from total operations
one fiscal year ago. )
equity (The amount
that an asset or business is worth, minus associated liabilities
it. For example, your home equity is the home's market value minus
any mortgages, liens, and home equity loans.)
equity securities
( A
security that represents an ownership stake rather than a debt
obligation. Equity securities include common and preferred stock,
but not bonds. )
escudo ( The national
currency of Portugal. )
Essential Account
Register (In Money, a streamlined version of the account register
that lets you track the accounts that you update online without
tracking transactions in detail or balancing. )
Essential Bills
(In
Money, a version of Bills that enables you to easily handle the
day-to-day tasks of managing and paying your bills, including
scheduling regular bills, keeping track of payment due dates,
setting up automatic payments, and assigning budget categories to
your bills.)
Essential Budgets
(In
Money, a budget that enables you to do day-to-day budgeting tasks,
including seeing what you spend in each budget category, comparing
income to expenses, creating a simple budget for regular expenses,
and comparing actual monthly spending to your budget. )
Essential Reports
(Essential Reports are simplified financial reports that
Money creates automatically based on the financial information in
your Money file. Essential reports include spending by category,
net worth, and credit card debt. )
estate ( Everything
you own, including your house, bank accounts, investment
portfolios, life insurance, personal property, and retirement
plans. )
estate planning
(
An overall strategy that coordinates the disposition of everything
you own, including your house, bank accounts, investment
portfolios, life insurance, and retirement plans. )
ETF (
Exchange-Traded Funds (ETFs) are securities that hold a basket of
stocks, bonds, or other investments, much like a mutual fund.
Unlike funds, they trade throughout the day as stocks do. Most ETFs
track an index, such as the S&P 500 or the Nasdaq 100.
)
euro ( The currency
of the member countries in the European Economic and Monetary
Union, issued by the European Central Bank. )
European-style
option ( An option contract that can be exercised only during a
specified time period just prior to its expiration. )
Europe stock fund
( A
Morningstar category for international equity funds that have at
least 75 percent of their stock holdings in Europe. )
Eurotop 100
( A
benchmark tracking the performance of the European stock market.
Officially known as the EUROTOP 100 Index (EUR), it comprises 100
of the most actively traded and highly capitalized stocks in
Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden,
Switzerland, and the United Kingdom. It is denominated in U.S.
dollars. )
even lots
(
Transactions in which stocks are purchased or sold in multiples of
100 shares. Also referred to as round lots. Brokers may charge a
higher commission on odd-lot orders. )
exchange
(An
organization that provides a marketplace for the trading of a
listed security. There are many exchanges around the world, but in
the United States, the New York Stock Exchange and the Nasdaq are
among the biggest.)
ex-dividend
(
Term indicating that a company recently announced a dividend for
its shareholders but hasn't yet paid the dividend. If a stock is
sold during the ex-dividend period, the dividend belongs to the
seller not to the buyer. )
exemption
(A
flat dollar amount that the Internal Revenue Service lets you
subtract from income before taxes are calculated. You claim one
exemption each for yourself, your spouse, and your
dependents.)
exercise
(To
buy or sell stock at a specific price, using the right granted by
an option. )
exercise price
(
See strike price. )
existing home sales
(A
report issued monthly by the National Association of Realtors that
estimates sales of existing homes, as opposed to new homes. It is a
closely watched indicator of activity in the housing sector.
)
exit level
(
Jargon term used by analysts to specify the recommended price at
which to sell a security. )
expectational
analysis ( An approach to investment analysis that takes into
account and measures the beliefs of investors and speculators
relative to the prevailing technical trends and fundamental facts.
The goal is to try to gauge the future direction of stock prices.
)
expected
risk/return ( The relationship between a stock's potential risk
and its potential return. Risk is estimated by the expected
volatility of the stock's price-that is, how much it goes up and
down. )
expense projections
(3-, 5-, and 10-year) ( Figures from a mutual fund's
prospectus that show how much an investor would expect to pay in
expenses-sales charges and fees-over the next 3, 5, and 10 years,
assuming a $1,000 investment that grows by 5 percent each year with
redemption at the end of each time period. )
expense ratio
(
The percentage of assets consumed by management fees, 12b-1 fees,
and all other asset-based costs that are incurred by a mutual fund.
(Brokerage costs and sales charges are not included.) )
expiration date
(
The date that an option expires. This is the last day that the
option holder can choose to purchase shares at the strike price (or
sell shares at the strike price, if the option is a put).
For stock options, this is the Saturday immediately following the
third Friday of the expiration month; however, brokerage firms may
set an earlier deadline for notification of an option buyer's
intention to exercise. If Friday is a holiday, the last trading day
will be the preceding Thursday.)
export (To save data
in a different file format so that it can be used by another
program, such as a tax preparation or spreadsheet program.
)
extraordinary (gains)
losses ( Includes income (or losses) from events and
transactions that are extraordinary and not expected to occur
again, such as the expense of settling a lawsuit. )
extraordinary
income ( Income from events and transactions that are
extraordinary and not expected to occur again, such as settling an
expensive lawsuit. )
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F
face value
(The amount indicated on an instrument, such as a bond
or check. The face value of a bond is its redemption value at
maturity. )
factory orders
( A
government report that combines the earlier announced durable goods
report and nondurable goods orders, such as food and tobacco
products. )
family name
(
The name of the family of funds to which a mutual fund belongs.
Fidelity, Vanguard, Janus, and many other firms offer fund
families, typically including stock, bond, and money market funds.
)
family of funds
( A
group of mutual funds that is offered by a single company, such as
Fidelity or Vanguard. )
Fannie Mae
(The popular name for the Federal National Mortgage
Association, a company listed on the New York Stock Exchange that
is a key player in the nation's housing business. Founded by the
federal government, Fannie Mae buys mortgages from lenders, thus
replenishing their cash to make more loans. It packages the loans
into securities for sale to investors. )
favorite accounts
(The accounts that you use most often and want to be
able to access quickly, such as your checking account. )
Federal Open Market
Committee (FOMC) ( A committee of the Federal Reserve
("The Fed") that makes national monetary policy decisions,
including whether to raise interest rates and whether to tighten or
loosen the money supply. )
Federal Reserve
System ( The independent central bank of the United States. The
system is governed by the Federal Reserve Board ("the Fed"). The
Fed can make the U.S. money supply expand or contract, and help the
economy do likewise, by buying or selling Treasury securities and
altering reserve requirements for U.S. banks. )
Fibonacci studies
( A
series of technical analysis studies that use charts and numeric
relationships to pinpoint high and low price levels for a security.
The four popular Fibonacci studies are arcs, fans, retracements,
and time zones. )
fiduciary
( A
person who holds a position of confidence, such as a trustee,
guardian, or executor. )
FIFO (First-in,
first-out. A method for tracking assets that are acquired over a
period of time, such as stocks or inventory. It assumes that you
sell assets in the same order you bought them. )
file (A computer
file that stores the information that you enter into Money. A
single Money file can contain many accounts, so if you have a new
account, bank, or brokerage, you can add those accounts to the
Money file that you already use.)
financial adviser
(
Someone who provides professional advice about your investment
portfolio, including stocks, bonds, mutual funds, and other
investments that fit your goals and risk level. )
financial planner
(
Someone who provides professional help with managing all of your
assets, your investment portfolio, real estate, insurance, and even
collectibles and college-savings accounts. Financial planners
commonly formulate trusts and provide tax advice. )
financials sector
( A
category of U.S. companies that includes banks, brokerage firms,
thrifts, insurance, and real estate companies. )
financing
activities ( The sale or purchase of a company's own stock or
bonds, payment of dividends, and any other finance charges incurred
in the company's operations. )
fiscal year (FY)
(The 12-month accounting period of a business. It may be
different from the calendar year.)
fixed asset
(
An asset that can't be instantly liquidated, such as a building,
factory, or piece of equipment. )
fixed cost
(A
cost that stays the same regardless of manufacturing or sales
volume. The cost of owning a warehouse, for example, might be the
same whether the warehouse is full or empty. )
float (%)
(
Common shares outstanding, minus insiders, divided by common shares
outstanding. )
foreclosure
(
The process of satisfying claims against someone who has defaulted
on a loan, such as a mortgage. It usually involves the forced sale
of the property to satisfy payment of the loan. )
foreign exchange
rate ( The price at which one currency trades for another.
)
foreign exchange
risk ( The risk that a long or short position in a foreign
security may be adversely affected by a change in the value of the
foreign currency. )
foreign funds
(
See international funds. )
foreign stock fund
( A
Morningstar category for international equity funds that focus on
foreign stocks and have no more than 10 percent of their equity
portfolio invested in the United States. )
Form 10-K
( A
report filed annually by public companies with the Securities and
Exchange Commission. The reportprovides detailed information about
the company's operations and finances and is audited by the
company's outside accountants. )
Form 10-Q
( A
quarterly report filed with the Securities and Exchange Commission
by public companies, similar to the annual Form 10-K, but less
comprehensive and (usually) not audited. )
Form 13-D
( A
form that must be filed with the Securities and Exchange Commission
whenever an investor acquires 5 percent of any public company.
)
Form 4 ( A report that
is filed with the Securities and Exchange Commission by directors,
officers, or owners of more than 10 percent of a public company
when they make purchases and sales of certain equity securities.
)
Form 8-K
( A
form that is filed with the Securities and Exchange Commission by
public companies to disclose a material event that might affect its
financial situation. An 8-K might be filed when the chief executive
resigns or some other unusual matter arises that could affect the
price of the company's stock. )
forward P/E
(Forward year price-earnings ratio (forward P/E) is the
analysts' consensus estimate for earnings per share in the
following 12 months divided by current price.)
franc ( A unit of
currency; several countries call their currency the franc,
including Switzerland.
The franc was also the name of the national currencies of Belgium,
France, and Luxembourg until early 2002, when these countries
adopted the common European currency, the euro (introduced in
1999).)
free cash flow
(
Conventional cash flow from operations, reduced by capital
expenditures and cash dividends paid, based on the premise that
these cash outlays are optional. )
front load
(A
fee levied by a mutual fund company on new investments in the
company's funds.)
FTSE 100
( A
benchmark index that tracks the performance of the London Stock
Exchange and comprising the 100 largest companies traded on the
exchange. The full name is Financial Times Stock Exchange 100, but
it is commonly called the Footsie 100. )
fully diluted earnings
per share ( Earnings per share (EPS) that takes account of all the
common stock that would exist if convertible securities and
warrants and stocks options were traded in for common shares.
)
fully diluted EPS from
continuing operations ( Earnings from continuing operations
divided by the fully diluted shares outstanding (including effects
of any convertible debentures, warrants, and so on). This excludes
income from discontinued operations and extraordinary gains and
losses. )
fully diluted EPS from
discontinued operations ( Earnings from discontinued
operations (during the reporting period) divided by the fully
diluted shares outstanding (given the dilution effects of any
convertible debentures, warrants, and so on). This excludes income
from extraordinary gains/losses. )
fully diluted EPS from
total operations ( Earnings for the most recent fiscal
year from total operations (continuing operations plus discontinued
operations) divided by the fully diluted shares outstanding (given
the dilution effects of any convertible debentures, warrants, and
so on). This excludes income from extraordinary gains and losses.
)
fundamental
analysis (Predicting future stock performance by analyzing the
factors that affect a company's profitability and earnings growth,
such as the economy, the company's earnings history, balance sheet,
management, product line, and others. Contrast with technical
analysis. )
fundamentals
(Characteristics of a specific business that value
investors find important, such as profitability, balance sheet
strength, management quality, and industry prospects. )
fund inception date
(
The date a mutual fund initially became available. )
fund manager
(
The person responsible for investing the monies of a mutual fund.
Some funds are run by one person, others by committee. )
fund transfer
(An
online transaction that moves money between accounts. When you
enter the transaction in one account, it is automatically recorded
in the other account.)
future occurrences
(Scheduled recurring transactions that will occur in the
future. Future occurrences do not include the next transaction
due.)
futures
(
Contracts to make or accept delivery of a given commodity on a
given date at a prearranged price. It is rare that anyone actually
delivers (or accepts) the commodity implied by a futures contract;
investors simply settle with money. )
futures options
(
Contracts that give the holder the right to buy or sell a specified
futures contract at an agreed-upon price before a specific
expiration date. )
FY ( See fiscal
year (FY). )
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G
gain/loss
(The profit or loss on a given security or portfolio
expressed in dollars. It is calculated as market value minus cost
basis.)
gain/loss %
(
The profit or loss on a given security or portfolio expressed as a
percentage. It is calculated as market value minus cost basis,
divided by cost basis. )
general obligation
sector ( A category that includes general obligation bonds,
which are repaid from general revenue and borrowings rather than
from the revenue of a specific project or facility. )
giant cap
(
See large cap. )
global funds
(
See international funds. )
good-till-canceled
order ( A limit order that stays on the books of the
exchange-trading floor until executed or until canceled by the
investor. )
goodwill
(
An intangible business asset that is listed on a company's balance
sheet, based on the amount the value of a business exceeds its
individual assets. Goodwill is the result of a good business
reputation and a recognizable name, among other things.
)
government income
funds ( A mutual fund that invests in government securities,
such as U.S. Treasury bonds, Ginnie Maes and other types of
mortgage-backed securities, and short-term government notes.
)
grace period
(Period of time during which actions such as the
assessment of late fees are not taken, even though payment is due.
In some cases, interest may not be charged during a grace
period.)
gross domestic product
(GDP) ( For the United States, the total value of goods and
services produced within the United States, including U.S.
production by foreign companies. )
gross margin
( A
company's gross operating profit divided by sales, reported as a
percentage. )
gross national product
(GNP) ( For the United States, the dollar value of all goods
and services produced in the United States, including goods and
services produced in other countries by U.S. companies.
)
gross operating
profit ( A company's operating revenue minus the cost of goods
sold. )
gross pay
(Wages or salary before taxes and other
deductions.)
gross profit
(
Revenue minus cost of goods sold. )
gross sales
( A
company's total sales before returns, discounts, and shipping
expenses. )
G-8 (group of
eight) ( An organization of eight of the world's major
industrialized countries that meets to discuss international
economic issues. Includes the United States, Canada, the United
Kingdom, France, Italy, Germany, Japan, and Russia. )
growth and income
funds ( Mutual funds that invest in both equity and debt
securities, mainly for the purpose of producing current income,
such as dividends and interest payments. )
growth persistence
( A
measure of how consistently a mutual fund has outperformed its
equity or fixed-income peers.
Value Line's calculation of growth persistence rewards a fund only
for its consistency of outperformance, not for its
degree of outperformance. )
growth rate
(
The rate at which a company's stock price, earnings, revenue,
and/or sales has changed or is expected to change in the future.
)
growth stock
(
The stock of a company whose earnings have consistently grown
faster than the average growth of other companies. Growth stocks
generally pay little or no dividends. )
Guaranteed Investment
Contract (GIC) ( A contract, issued by an insurance
company and sold only to pension plans and certain other types of
retirement funds, that pays a fixed interest rate for a fixed term,
typically one to five years. )
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H
Hang Seng
( A
benchmark index that tracks the performance of the Hong Kong Stock
Exchange. )
head and shoulders
(
For technicians, a chart pattern (for a stock or index, for
example) that indicates a peak, a decline, a second even higher
peak, a decline, a rebound to the level of the first peak, and yet
another decline. A head and shoulders pattern may indicate that
that the stock is headed downward. )
health sector
( A
category of companies that includes pharmaceutical, health-care
services, medical devices, and drug wholesale companies.
)
hedge fund
(An
investment pool, generally open only to investors of high net
worth, that takes high risks to seek high returns by using tools
such as short selling, leverage, options, and futures. )
hedging
( A
method used to minimize investment risk. For example, a stockholder
might buy a put option or sell a call option on the underlying
stock. If the stock goes down, the option will rise in value,
providing a "hedge" against losses. )
high ( The highest
price reached by a stock, mutual fund, or other security in a given
period of time, such as a day, month, or year. )
high estimate
(
The highest of the earnings estimates on a stock by any analyst.
)
high-yield bond
fund ( A Morningstar category for taxable bond funds that
invest at least 70 percent of their portfolio in high-yield
corporate bonds. Also known as junk bond funds. )
Hong Kong Options
Index ( A benchmark index comprised of 30 of the most highly
capitalized stocks in the Stock Exchange of Hong Kong Ltd., used to
track performance of the Hong Kong stock market. It is denominated
in U.S. dollars. Also called HKO. )
housing sector
( A
category that includes single and multifamily housing companies.
)
housing starts and
building permits ( A measure of the number of
residential units on which construction is begun each month. A
housing start is defined as the beginning of excavation of the
foundation for the building. )
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I
import (To bring
information in from another program or Web site and have Money
convert it to the file format Money uses. )
incentive stock option
(ISO) (A benefit that some companies offer their employees. An
ISO gives employees the option to purchase company stock at a fixed
price. If the stock rises in value, the employee profits by the
difference between the price of the option (sometimes called the
strike price) and the price when the option is exercised and sold.
)
inception date
(
The date a mutual fund was started or first offered to the public.
)
income (1-year growth
rate) ( The year-to-date percent change in net income versus
the same period one year ago. )
income (5-year
growth) ( The compound annual growth rate of income over a
five-year period. )
income (last 12
months) ( The sum of the last four actual quarters of net income
from total operations. This calculation is the same for income from
continuing operations. )
income from continuing
operations ( Income from operations that remain ongoing but not
from operations that have been closed or sold. )
income from cumulative
effect of accounting change ( Gains or losses from changes in
accounting methods, such as changes to the way depreciation or
inventory values are calculated. )
income from tax loss
carryforward ( Income from the tax benefit of a net loss from
operations in a previous year that is carried forward to reduce net
income in the current year. )
income from total
operations ( Income from all operations, including those that
have been discontinued or sold off. )
income guidelines
(An
estimate of the size of loan that you can get based on your income,
the amount of your anticipated mortgage debt, and your consumer
debt. )
income per employee
(
Profits divided by number of workers. It is an indication of how
effectively a company turns the effort of its workforce into
earnings for shareholders. )
income statement
( A
financial statement that shows a company's revenue, expenses, and
profit during a given accounting period. )
income stock
( A
stock purchased primarily for income, paid out in the form of
dividends. )
income tax
(An
annual tax on a individual's or corporation's income that is levied
by the federal government and by some state
governments.)
increase/decrease in
inventories ( Change in inventories over time. )
increase/decrease in
other current assets ( The increase or decrease between
periods of the current assets that are not assigned to accounts
receivable and inventories. This category typically includes
prepayments, deferred charges, and amounts (other than trade
accounts) due from parents and subsidiaries. )
increase/decrease in
receivables ( Change over time of amounts owed to the company.
)
index (A composite of
securities that serves as an indicator for the overall market or
some segment of it. The best known indexes are the Dow Jones
Industrial Average and Standard & Poor's 500, both of which
reflect the performance of large U.S. companies.)
index fund
(A
mutual fund that seeks to match the performance of some market
index, such as the Standard & Poor's 500. )
index option
(
An option on a stock index, usually the Standard & Poor's 500,
that provides a way to bet on the direction of the market.
)
Individual Retirement
Arrangement (IRA) (A retirement plan to which most
individuals with employment income can contribute. Traditional IRA
contributions are generally tax deductible, and gains in IRAs are
not taxed until they are withdrawn at retirement. Roth IRA
contributions are not deductible, but withdrawals after retirement
are not taxable.)
industrial cyclicals
sector ( A category that includes aerospace, construction,
machinery, machine tools, chemicals, metals, paper, and
building-materials companies. )
industrial development
bond fund ( A municipal bond secured by the creditworthiness of a
private business rather than a government entity. These bonds are
issued by local governments to attract new businesses or to help
local businesses expand. )
industrial
production ( A government report that provides a fixed-weight
measure of the physical output of the nation's factories, mines,
and utilities and a measure of capacity utilization. )
industrial sector
( A
category that includes economic and industrial development,
pollution control, resource recovery, conventions, expositions,
stadiums, and hotels. )
industry
( A
category that indicates the field in which a company operates. For
example, Microsoft is in the computer software industry.
)
industry full name
(The full name of the industry in which a company does
business.)
inflation risk
(
The risk that money will not be worth as much in the future because
of cost increases in the things people buy, such as housing,
clothing, and medical care. )
initial jobless
claims ( A government index that tracks the number of filings
for state unemployment benefits. Increases or decreases in claims
indicate possible slowing or accelerating job growth. A report on
the index is normally issued each Thursday. )
initial public offering
(IPO) (The first publicly available stock sold by a company.
)
insider trading
(Buying and selling by a company's own officers and
directors for their personal accounts. These trades are legal as
long as they are based on publicly available information and follow
rules established by the Securities and Exchange Commission.
Insider trades are illegal if they are based on nonpublic
information, even if the person trading is not affiliated with the
company.)
institutional fund
( A
mutual fund designed for purchase by institutional investors, such
as pension funds or endowments, rather than by individual
investors. )
institutional
investor ( Someone who manages investments for large
organizations that typically purchase very large lots of stock.
Mutual fund managers, pension fund managers, and insurance
companies are institutional investors. )
institutional
ownership (The share of a company's sotck that is owned by banks,
mutual funds, pension funds, insurance companies, and other
institutions that usually trade in very large lots.)
intangibles
(
Items such as goodwill or patents that have value but are neither
physical nor financial in nature. )
interest coverage
(
The latest 12 months' earnings before interest and taxes (EBIT)
divided by the latest 12 months' interest expense (all taken from
the income statement). Interest coverage is a measure of a
company's ability to handle debt service. )
interest expense
(
The cost of interest on outstanding debt. It includes fixed
interest expenses net of capitalized interest, as well as dividends
on preferred stock of unconsolidated subsidiaries. )
interest rate risk
(
Investment risk associated with the possibility that interest rates
will change the value of an investment. Interest rates have the
greatest affect on bond values. )
interest-sensitive
stock ( A stock whose price is especially affected by rising
or falling interest rates, such as the stock of automakers, home
builders, mortgage lenders, and financial institutions.
)
intermediate bond
(
Bonds that mature in 7 to 15 years. Some people consider even
5-year bonds to be intermediates. )
intermediate-term bond
fund ( A Morningstar category for taxable bond funds that
invest at least 70 percent of their assets in a mixture of
corporate and government bonds, with a primary focus on
intermediate-term bonds. )
intermediate-term
government fund ( A Morningstar category for taxable
bond funds that invest at least 80 percent of their bond portfolio
in intermediate-term government bonds. )
international bond
fund ( A Morningstar category for taxable bond funds that
invest at least 40 percent of their assets in bonds issued by
foreign governments or corporations.)
international funds
(
Mutual funds that invest in stocks and/or bonds of companies
headquartered outside the United States. )
international
hybrid ( A Morningstar category for international equity funds
that invest at least 20 percent but less than 70 percent of their
portfolio in stocks, with at least 40 percent of all stock and bond
investments in foreign countries. )
international trade
report ( A government report that measures the international
trade balance on a monthly basis. This report is watched for
overall trends in the trade balance and trends in both exports and
imports of goods and services. )
in the money
(
An option with intrinsic value. A call is in the money when the
market price of the underlying security is greater than the option
strike price. A put is in the money when the market price of the
underlying security is less than the option strike price.
)
intrinsic value
(
The difference between an in-the-money option strike price and the
current market price of the underlying security. )
inventories
(
Merchandise bought for resale, or supplies and raw materials
purchased for use in revenue-producing operations. )
inventory turnover
(
The cost of sales over the latest 12 months divided by the
average inventory from the same period. The rate is an indicator of
how well the company's products are succeeding in the marketplace.
)
investing
activities ( Cash derived from (or used in) securities
investments and asset purchases and sales. )
investment
(Assets such as stocks, bonds, mutual funds, real
estate, or other items purchased for expected favorable future
returns. )
investment account
(A
brokerage account, retirement account, or other account in which
you hold investments. You track individual investments, such as
stock purchases, in the associated investment account. )
investment category
(The type of investments in a fund-for example, European
stocks, intermediate-term bonds, or small-cap growth stocks.
)
investment limited
partnership ( A group of individuals who pool their money for the
purpose of investing. Profits, tax deductions, and other items are
usually split according to each investor's interest in the pool. At
least one investor-known as the general partner-is responsible for
running the partnership's investment. The general partner usually
has total liability, while the investors-known as limited
partners-are liable only for the amount they put in. )
IPO ( See initial
public offering. )
IRA ( See
Individual Retirement Arrangement. )
ISP (Internet
service provider. The company that provides you access to the
Internet. )
issuance of capital
stock ( The process by which a company raises cash by selling
stock to investors. The stock can be either common stock or
preferred stock, although capital stock is sometimes used to mean
common stock. )
issuance of debt
(
Proceeds from company borrowing. )
itemized deductions
(Expenses that you can deduct from your income for tax
purposes on Schedule A, such as charitable contributions, medical
expenses, mortgage interest, real estate taxes, and other expenses.
)
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J
Japan Index
(
Also called JPN. A benchmark that tracks the performance of the
Japanese stock market. It comprises some of the most highly
capitalized stocks on the Tokyo Stock Exchange. It is denominated
in U.S. dollars. )
Japan stock fund
( A
Morningstar category for international equity funds that have at
least 75 percent of their stock holdings in Japanese companies.
)
joint return
(Tax return filed by a married couple who chooses to
calculate their income tax based on their combined income and
deductions.)
junk bond
( A
debt security that pays investors a high interest rate because of
its high risk of default. )
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K
Keogh plan
( A
pension plan designed for self-employed individuals. )
key support
( A
price level for a security or an index that may signal a major
change in market direction or sentiment if it is penetrated.
)
krona ( A unit of
currency in Iceland and Sweden. )
krone ( The national
currency of Denmark and Norway. )
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L
laddering
(
The practice of reducing market risk by owning a series of bonds or
other investments of staggered durations. )
Large Blend
( A
Morningstar category for domestic equity funds that invest in a
mixture of large growth stocks and large value stocks. These stocks
typically have a market cap greater than $5 billion and a combined
Price/Earnings ratio plus Price/Book value between 1.75 and 2.25.
)
large cap
( A
company that has a very high market capitalization, or a mutual
fund that specializes in investing in such companies. )
Large Growth
( A
Morningstar category for domestic equity funds that invest in large
companies whose share prices are expected to increase and that
typically pay little or no dividends. Stocks held in these funds
typically are large-cap stocks that have a combined Price/Earnings
ratio plus Price/Book value greater than 2.25. )
Large Value
( A
Morningstar category for domestic equity funds that invest in large
companies whose shares are priced below the market compared to
their peers. Stocks held in these funds typically are large-cap
stocks that have a combined Price/Earnings ratio plus Price/Book
value less than 1.75. )
last (The current
trading price of one unit of a particular security. Note: Prices
are usually delayed by at least 20 minutes.)
last trade size
(
The most recent number of security shares traded. )
last updated
(The time or date that an account or investment quote
was updated. Quotes are usually delayed at least 20 minutes unless
you have access to real-time quotes.)
latest dividend
rate ( The number of times the company pays dividends per
year multiplied by the latest dividend, expressed in dollars. If a
company's board has not committed to dividend payments in the
future, the latest reported dividend rate equals the total
dividends paid in the past 12 months. )
latest fiscal EPS
(
Earnings per share for the most recent fiscal year. )
latest quote
(
The most recent trade price (buy or sell) for a stock, as reported
by all exchanges. )
Latin American stock
fund ( A Morningstar category for international equity funds
that have at least 75 percent of their stock holdings in Latin
American companies. )
leading economic
indicators ( Measures that may provide an indication of which
way the overall economy is heading. Typical leading indicators
include new orders for durable goods, new jobless claims, money
supply, hours in the average workweek, building permits issued, and
stock prices. )
leverage
(
The use of debt to increase returns. )
leveraged buyout
(LBO) ( The purchase of a company by using a large amount of
debt, much of it short-term bank borrowing secured by the assets of
the company itself. After the acquisition, the acquired company
typically issues bonds to pay off a portion of the debt created by
the takeover. )
leverage ratio
(
Total assets divided by total stock equity. This ratio indicates
how highly leveraged a company is. )
liability
(An
obligation to pay. Short-term debt, long-term debt, and certain
other obligations appear as liabilities on a company's balance
sheet. )
lien (A creditor's
claim against a property.)
limited
partnerships ( A form of business organization that offers some of
the partners limited liability. It consists of a general partner,
who organizes and manages the partnership, and limited partners,
who contribute capital but have limited liability and assume no
active role in day-to-day management. )
limit order
(
An instruction given by an investor to a broker to buy shares at or
below a certain price (or sell shares at or above a certain price).
The opposite of a limit order is a market order. )
linear regression
channels ( A technical indicator used to determine the trend a
security is developing and the likely price range that will take
place within that trend. The channel consists of an upper line, a
middle line, and a lower line. The upper channel line is created by
connecting a series of recent high price points in a straight line,
the middle line by connecting intermediate highs and lows, and the
lower channel line by connecting a series of low price points. The
channel provides a picture of the overall trend of a stock, whether
it is in an uptrend, in a downtrend, or just consolidating.
)
line charts
( A
chart that displays only the closing price for a security for each
time period. A line connects closing values from each period. Often
used for plotting mutual funds, which typically have a daily close
value only. )
line of credit
(An
agreement to lend money to a borrower up to a specified amount.
Unlike a one-time loan, a line of credit can be borrowed on as
needed and typically does not have to be paid off by a specific
date.)
liquidity
(
The extent to which an individual or firm can produce cash when
necessary. Cash and assets easily converted to cash are liquid
assets. )
liquidity ratio
( A
measure of how much of a given stock needs to be traded for the
price to change by 1 percent. The liquidity ratio is figured by
adding up the daily percentage change in closing price for each
trading day of the month, regardless of direction. This number is
divided into the total dollar volume for the month. The higher the
resulting number, the more liquid the stock and thus the more
attractive it becomes for conservative investors and institutions
whose large trading might otherwise move the market too much.
)
living will
(A
document in which a person makes known the medical treatment he or
she wants or doesn't want in case of a terminal illness. A living
will takes effect only when the patient is incapacitated and can no
longer express his or her wishes. )
load (A sales
commission charged when you buy or sell shares in certain mutual
funds. Mutual funds that don't charge a sales commission are
no-load funds.)
load-adjusted return
(1, 3, 5, 10 year) ( Total returns, calculated monthly
and adjusted downward to account for sales charges.
For funds with front-end loads, the full amount of the load is
deducted. For deferred or back-end loads, the percentage, often
coupled with a 12b-1 fee, usually disappears entirely after several
years. )
load fund
( A
mutual fund that charges a commission, or "load," on every purchase
of shares. Load funds are usually purchased through stockbrokers
and financial planners. )
loan (An agreement
to borrow or lend money, usually with an interest charge on the
amount borrowed.)
lock-limit
( A
tool that the exchanges use to help protect investors in a
whirlwind market. If a contract price moves up or down to the
pre-established price limit, the market "locks up" or "locks down"
and doesn't open up again until the price returns to an acceptable
level. )
long bond
( A
bond with a maturity of 30 years or longer. Generally, the term has
referred to the 30-year Treasury Bond, which was discontinued by
the U.S. Treasury Department in 2001. )
long-term bond fund
( A
Morningstar category for taxable bond funds that invest at least 70
percent of their assets in bonds, with a primary focus on corporate
and investment-grade bonds. These bonds have a duration of more
than 6 years or an average effective maturity of more than 10
years. )
long-term debt
(
Debt due in more than a year. )
long-term government
fund ( A Morningstar category for taxable bond funds that
have at least 80 percent of their bond portfolio invested in
long-term government bonds and 70 percent of all assets invested in
bonds. These bonds have a duration of greater than 6 years or an
average effective maturity greater than 10 years. )
lot (A set of stock
or mutual fund shares that were purchased at the same time. For
stocks, a lot is usually 100 shares.)
low ( The lowest
price reached by a stock, mutual fund, or other security in a given
period of time, such as a day, month, or year. )
low estimate
(
The lowest of the given earnings estimates by any analyst.
)
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M
managed futures
( A
managed account or fund in which professional money managers trade
futures and forward contracts. )
manager tenure
(
The number of years a mutual fund manager has been running the
fund. )
margin account
(A
brokerage account that lets an investor buy securities on credit or
borrow against securities held in the account to make additional
investments.)
marginal rate
(The tax rate on an additional dollar of
income.)
margin call
( A
call for additional capital to bolster the equity in an investor's
margin account. )
marketability risk
(
The chance that there will be no ready market for your investment
if you want to sell it quickly. )
market
capitalization (The value of a company's outstanding
shares, calculated as the total number of common shares outstanding
multiplied by their current price.)
market cap
composition ( A fund's net assets by market capitalization, or
the size of companies they invest in. In Morningstar methodology,
large-cap stocks are those that account for the top 70 percent of
the market capitalization of Morningstar domestic stocks; mid-cap
stocks are those that account for the next 20 percent; and
small-cap stocks are the balance. )
market maker
(
The individuals or firms who maintain the best bid and ask prices
on the floor of an exchange, such as the Chicago Board of Exchange.
Market makers bid for or offer securities for sale, thus keeping a
market orderly. Market makers can compete with each other on the
same underlying security's option pricing to provide the best bid
and ask prices at any time. )
market order
(
An order to purchase or to sell at the best available price. Market
orders must be executed immediately and therefore take precedence
over all other orders. )
market timing
( A
technique used by investors or money managers who believe that they
can predict when the market will change course, and buy or sell
investments accordingly. )
market value
(current) ( The market value of all of a company's outstanding
shares (in other words, price multiplied by shares). It is a rough
estimate of what a company is worth. Also known as market
capitalization or market cap. )
match (a
transaction) (The process of combining two transactions in your
account register that are actually the same transaction. These
duplicate transactions typically occur when you enter transactions
manually and then download transactions from your bank.)
material
participation (Meeting the IRS guidelines for working in and being
involved in a business activity on a regular basis, as opposed to
being only an investor.)
maturity
(The date on which a bond's principal must be repaid at
the face amount.)
mean ( The average
from which the standard deviation is calculated. In security
analysis, the mean return is the average of all of the expected
returns on investments in a portfolio. )
mean recommendation
(
An arithmetic average of analysts' buy-sell recommendations for a
given stock. )
Media General Financial
Statements ( Statements prepared by Media General by using a
proprietary standardized format for industrial companies. When
importing data from SEC filings or other company-prepared
statements, Media General reserves the right to reclassify line
items and regroup amounts to meet their specifications. Therefore,
it is possible that Media General Financial Statements and other
financial statements on MSN Money will not have a one-for-one
mapping of line items and amounts. This standard format enables
direct comparison of all companies, industries, and indexes across
multiple time frames and for a multitude of factors. )
median market cap
( A
measure of the size of companies in which a mutual fund invests.
Half the companies in the fund have a market capitalization larger
than this number, and half have a market capitalization that is
smaller. )
medical sector
( A
category that includes pharmaceuticals, health-care services,
medical devices, and drug wholesalers. )
medium cap
(
See mid-cap. )
merge (an account)
(To
combine two accounts, typically when your Money file contains two
versions of some accounts. Usually this occurs if one version was
downloaded when you set up online services and you set up another
version manually. You can merge the contents of these accounts so
that all of the account information is in one place.)
Mexico Index
( A
stock market index based on 10 of the most highly capitalized
Mexican companies traded as American Depositary Receipts (ADRs). It
is denominated in U.S. dollars. Also known as MXY. )
micro cap
(
See small cap. )
mid-cap
(
Classification of stocks with medium-sized market capitalization,
or the funds that invest in those stocks.
Under Morningstar's methodology, mid-cap stocks account for the
10th to 30th percentile of the market capitalization of Morningstar
domestic stocks.)
Mid-Cap Blend
( A
Morningstar category for domestic equity funds that invest in a
mixture of mid-size companies whose share prices are expected to
increase (growth stocks) and mid-size companies whose share are
priced below the market (value stocks). )
Mid-Cap Growth
( A
Morningstar category for domestic equity funds that invest in
mid-size companies whose share prices are expected to increase
significantly (growth stocks). Stocks held in these funds typically
are mid-cap stocks with a combined Price/Earnings ratio plus
Price/Book value greater than 2.25.)
Mid-Cap Value
( A
Morningstar category for domestic equity funds that invest in
mid-size companies whose shares are priced below the market
compared to their peers (value stocks). Stocks held in these funds
typically are mid-cap stocks with a combined Price/Earnings ratio
plus Price/Book value of less than 1.75. )
minimum initial
purchase ( The smallest sum a fund will accept to establish a new
account. )
minimum subsequent
purchase ( The smallest additional investment permitted by a
given mutual fund. )
minority interest
(
Stockholders who own less than 50 percent of a subsidiary's
outstanding voting common stock. The minority stockholders hold an
interest in the subsidiary's net assets and share earnings with the
parent company.
Minority interest also refers to the stated value of the subsidiary
stock not owned by the parent company plus the minority interest's
equity in the surplus of the subsidiary. This item includes
preferred dividend averages on the minority preferred stock
(preferred shares not owned by the reporting parent
company).)
miscellaneous revenue
sector ( A category that includes revenue bonds that don't fall
into other obvious categories. )
Mitsubishi Index
( A
chain-store sales index that measures sales on a weekly basis for
nine large retailers. )
modern portfolio
theory ( A sophisticated investment approach that helps
investors estimate statistically expected risks and returns for
their investment portfolios. Also called "portfolio management
theory" or "portfolio theory." )
momentum
(
The underlying power or thrust behind an upward or downward price
movement. Momentum is represented on a chart as a line that
continually fluctuates above and below a horizontal equilibrium
level that represents the halfway point between the extreme
readings. )
money flow (MF)
(The amount of money flowing into and out of a security,
calculated daily by multiplying the number of shares traded by the
change in closing price. If prices close higher, money flow is a
positive number. If prices close lower, money flow is a negative
number. )
money market fund
( A
mutual fund that invests in very short-term securities, such as
Treasury bills, certificates of deposit, and commercial paper and
that pays interest. The share price is kept stable at $1.
)
money supply
(
The amount of money, monitored and heavily influenced (if not
controlled) by the U.S. Federal Reserve Bank. There are three
components of money supply. M1 consists of currency, checking
accounts, money market funds, negotiable order of withdrawal (NOW)
accounts, and travelers checks. M2 is everything in M1 plus time
deposits exceeding $100,000 and repurchase agreements. M3 includes
M2, savings bonds, Treasury bills, commercial paper, euros, and
more. )
Morningstar
(
The premier provider of unbiased information about mutual funds,
including fund comparisons, risk assessments, and other analyses.
Morningstar's analysts are quoted widely in the popular press, and
Morningstar's star system for rating funds is closely watched by
investors, the fund industry, and the media. )
Morningstar 3-, 5-, and
10-year rating (A monthly mutual fund rating that is
based on performance and risk. To calculate a fund's star rating
for a period (3, 5, or 10 years), its Morningstar Risk score is
subtracted from its Morningstar Return score. Funds that score in
the top 10 percent of their broad investment category receive five
stars. Funds in the next 22.5 percent get four stars; funds in the
middle 35 percent get three stars; and funds in the next 22.5
percent get two stars. Funds scoring in the bottom 10 percent get
one star. )
Morningstar 3-, 5-, and
10-year return rating (A mutual fund rating that is based
on the fund's return compared to that of other funds in its
category. To calculate a fund's star rating for a period (3, 5, or
10 years), Morningstar first adjusts for maximum front-end loads,
applicable deferred loads, and applicable redemption fees. Then
Morningstar calculates the excess return for each fund, defined as
the fund's load-adjusted return minus the riskless return for
90-day Treasury bills over the same period. Funds that score in the
top 10 percent their category receive five stars. Funds that score
in the next 22.5 percent get four stars; funds in the middle 35
percent get three stars; and funds in the lower 22 percent receive
two stars. Funds that score in the bottom 10 percent receive a one
star.)
Morningstar 3-, 5-, and
10-year risk rating (A mutual fund rating that is based
on its downside volatility compared to that of other funds in its
category. To calculate this risk score for a period (3, 5, or 10
years), Morningstar plots monthly fund returns in relation to
riskless Treasury bill returns. Morningstar adds the amounts by
which the fund trails the T-bill return each month and divides that
total by the period's total number of months. A fund that scores in
the top 10 percent of its broad investment category receives five
stars. Funds that score in the next 22.5 percent get four stars;
funds in the middle 35 percent get three stars; and funds in the
lower 22 percent receive two stars. Funds that score in the bottom
10 percent receive a one star.)
Morningstar
category ( Morningstar categorizes Domestic Equity Funds based on
the style and size of the stocks that they typically own. The style
categorization is Value, Blend, or Growth, and the size divisions
reflect the median market capitalization of the companies held in
the fund, which are categorized as either Small, Medium, or Large.
Based on their investments over the past three years, domestic
equity funds are placed in one of the following nine
categories:
- Large Growth
- Large Blend
- Large Value
- Medium Growth
- Medium Blend
- Medium Value
- Small Growth
- Small Blend
- Small Value
Morningstar also includes several other specialty domestic equity
fund categories, such as Specialty Heath Care and Specialty
Technology, as well as International Equity, Bond, Taxable Bond,
and Municipal Bond categories. )
Morningstar rating
(
The weighted average of a fund's 3-, 5-, and 10-year ratings.
)
Morningstar return
rating ( The weighted average of a fund's 3-, 5-, and 10-year
return ratings. )
Morningstar risk
rating ( The weighted average of a fund's 3-, 5-, and 10-year
risk ratings. )
mortgage-backed
securities ( Securities that are issued by mortgage lenders such
as banks, the Government National Mortgage Association (Ginnie
Mae), or the Federal National Mortgage Association (Fannie Mae).
)
most-active list
( A
list of stocks with the highest trading volume on a given day.
)
moving average
(
The average price of a security over a given period (such as 5, 50,
or 200 days), calculated for a consecutive series of those periods.
)
moving average
convergence/divergence (MACD) ( A technical indicator
developed by Gerald Appel that signals overbought and oversold
conditions by measuring the intensity of public sentiment. It is
calculated as the difference between two exponential moving
averages. A third exponential moving average is plotted on top of
the MACD as a trigger line to provide buy and sell signals.
)
moving average
envelope ( A trading band (bounded by upper and lower lines) that
is plotted on top of a security's price chart at a specified
percentage above and below a selected moving average. )
Multisector Bond
Fund ( A Morningstar category for taxable bond funds that
seek income by diversifying their assets among several fixed-income
sectors, usually government-issued bonds, foreign bonds, and
high-yield corporate bonds. To be classified as a bond fund by
Morningstar, at least 70 percent of all assets must be invested in
bonds. )
municipal bond
(A
bond issued by a state or local government or other government
unit, usually for building public facilities (such as roads,
schools, or parks). Interest earned from municipal bonds is
typically exempt from federal income taxes.)
Municipal bond
national, intermediate term fund ( A Morningstar category for
tax-free bond funds that invest in nationwide intermediate-term
municipal bonds whose interest is paid by taxes or project
revenues. These bonds have an average duration from 3.5 to 6 years
or an average effective maturity from 4 to 10 years. To be
classified as a bond fund by Morningstar, at least 70 percent of
all assets must be invested in bonds. )
Municipal bond
national, long term fund ( A Morningstar category for tax-free
bond funds that invest in nationwide long-term municipal bonds
whose interest is paid by taxes or project revenues. These bonds
have an average duration of more than 6 years or an average
effective maturity greater than 10 years. To be classified as a
bond fund by Morningstar, at least 70 percent of all assets must be
invested in bonds. )
Municipal bond, short
term (single-state and national) fund ( A Morningstar
category for tax-free bond funds that invest in nationwide or
single-state short-term municipal bonds whose interest is paid by
taxes or project revenues. These bonds have an average duration of
less than 3.5 years or an average effective maturity less than 4
years. To be classified as a bond fund by Morningstar, at least 70
percent of all assets must be invested in bonds. )
Municipal California
intermediate fund ( A Morningstar category for
tax-exempt bond funds that invest at least 80 percent of their
assets in California municipal bonds based on holdings for the last
three years. These bonds have an average duration of 4.5 to 7
years. )
Municipal California
long term fund ( A Morningstar category for
tax-exempt bond funds that invest at least 80 percent of their
assets in California municipal bonds based on holdings for the last
three years. These bonds have an average duration of more than 7
years. )
Municipal New York
intermediate fund ( A Morningstar category for
tax-exempt bond funds that invest at least 80 percent of their
assets in New York municipal bonds based on holdings for the last
three years. These bonds have an average duration of 4.5 to 7
years. )
Municipal New York long
term fund ( A Morningstar category for tax-exempt bond funds that
invest at least 80 percent of their assets in New York municipal
bonds based on holdings for the last three years. These bonds have
an average duration of more than 7 years. )
municipal revenue
bond ( Type of municipal bond issued to finance public works
projects, such as airports, tunnels, or sports stadiums. Payment of
interest and principal depends on the revenue generated from the
completed project. )
Municipal single-state
bond, intermediate-term fund ( A Morningstar category for
tax-exempt bond funds that limit their investments to a single
state, allowing shareholders to avoid state taxes. These bonds have
an average duration of 3.5 to 6 years or an average effective
maturity of 4 to 10 years. To be classified as a bond fund by
Morningstar, at least 70 percent of all assets must be invested in
bonds.)
Municipal single-state
bond, long-term fund ( A Morningstar category for
tax-exempt bond funds that limit their investments to a single
state, allowing shareholders to avoid state taxes. These bonds have
an average duration of more than 6 years or an average effective
maturity of more than 10 years. To be classified as a bond fund by
Morningstar, at least 70 percent of its assets must be invested in
bonds.)
mutual fund
(
An enterprise that pools funds from customers and invests them in a
portfolio of securities, in keeping with the goals and principals
stated in its prospectus.)
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N
naked calls
( A
form of option writing in which an investor sells a call against
securities that he doesn't own. The writer's risk is unlimited,
because if the option owner exercises the right to buy the stock,
the writer must buy the shares at the current price.)
naked puts
( A
form of option writing or selling in which the seller owns neither
the underlying security nor a different option on that same
security with the same (or later) expiration date and higher strike
price, leaving the seller exposed to unlimited risk. )
Nasdaq (The National
Association of Securities Dealers Automated Quotation System. It
was the first electronic stock market and lists a broad variety of
U.S. and foreign companies.)
Nasdaq Composite
Index ( An index of stocks traded on the Nasdaq. )
necessary category
(A
category for fixed income or expenses that occur every month. For
example, housing expense is a necessary expense category, as
opposed to recreation, which is discretionary. All categories are
marked as necessary by default until you change them.)
Negative Volume Index
(NVI) ( An index that focuses on days when the volume
decreases from the previous day. NVI analysts believe that smart
investors take positions on lower volume days. )
net assets
(A
figure, recorded in millions, that represents the current total
value of a mutual fund's holdings.)
Net Asset Value
(NAV) (The current value of an asset, calculated by
subtracting the asset's liabilities from its assets. For mutual
funds, the NAV is reported as the fund's current value divided by
the number of outstanding shares and is usually the price for one
share. )
net cash from
continuing operations ( The sum of depreciation and
amortization, deferred income taxes, operating gains/losses,
extraordinary gains/losses, other non-cash items, accounts
receivable, inventories, other current assets, short-term debt, and
other current liabilities. )
net cash from
discontinued operations ( Cash gains that result from the
sale of discontinued operations (but not an extraordinary gain or
loss). )
net cash from financing
activities ( The net sum of issuance of debt, issuance of
capital stock, repayment of long-term debt, repurchase of capital
stock, payment of cash dividends, and other financing charges.
)
net cash from investing
activities ( The sum of the sale of property, plant, and
equipment; sale of short-term investments; purchases of property,
plant, and equipment; purchase of short-term debt; and other
investing changes. )
net cash from operating
activities ( The sum of net cash from continuing operations and
net cash from discontinued operations. )
net change in cash and
cash equivalents ( The difference between the cash and
cash equivalents at the beginning and end of the reporting period.
)
net income or loss
(
The earnings or profit of a company after all costs have been
deducted. )
net income from
continuing operations ( Income taken before preferred
dividends, extraordinary gains and losses, income from cumulative
effects of accounting change, nonrecurring items, income from tax
loss carryforward, and other gains and losses. )
net income from
discontinued operations ( Gains from sales of discontinued
operations, not including extraordinary gains/losses. )
net income from total
operations ( Income from total operations (continuing and
discontinued operations), after taxes and minority interest and
before extraordinary gains/losses. )
net insider
transactions ( The number of shares purchased minus the number of
shares sold by corporate officers and directors for the latest
month, as reported to the Securities and Exchange Commission. There
is usually a three-month lag in reporting insider transactions.
)
net investment
income ( Investment income minus investment expenses.
)
net position change
(
Buyers minus sellers. )
net profit margin
(
The latest 12 months' net income divided by the latest 12 months'
sales, expressed as a percentage. )
net worth
(The value of everything owned by you or your business,
minus any of the values of any liabilities.)
new home sales
( A
government report that indicates the level of new, privately owned,
one-family houses sold and for sale. )
new listing
( A
stock that recently began trading on a given exchange. )
new positions
(
Total number of institutional owners with no ownership in the prior
filing period and the aggregate number of shares bought by them.
)
New York Stock
Exchange (The biggest, oldest, and most important U.S. securities
exchange, where most of the nation's largest and best-established
companies are listed.)
next upcoming
occurrence (The next pending occurrence of a scheduled
transaction.)
Nifty Fifty
(A
list of 50 large stocks, including Eastman Kodak and
Anheuser-Busch, that were very popular in the 1960s because they
purportedly guaranteed profits for investors who bought and held
the shares. As a group, the stocks lost 42 percent of their value
in the 1973 bear market. A "New Nifty Fifty" list, devised in 1995
by Morgan Stanley, favored companies with large shares of sales
coming from outside the United States. )
Nikkei 225
( A
stock index benchmark that tracks the performance of the Tokyo
Stock Exchange. )
no-load fund
(A
mutual fund with no transaction charges on purchases or sales of
its shares (although it may assess other charges).)
nominal return
(
The return on an investment without taking inflation into account.
)
non-amortized loan
(An
interest-free, short-term loan or debt.)
noncurrent assets
(
Assets not expected to be converted into cash, sold, or exchanged
within the normal operating cycle of a company, which is typically
one year. )
noncurrent
liabilities ( Liabilities due after one year. )
nonvoting stock
(
Stock that carries no power to vote on matters put before the
shareholders. Preferred stock usually is nonvoting. )
normalized income
(
Net income from total operations adjusted for unusual or one-time
events. )
number of analysts
(
The number of analysts providing earnings estimates. )
number of employees
(
The number of people who are employed by a company. )
number of shares
(The quantity of shares held of a given security.
)
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O
occasional expenses
(Expenses that occur irregularly during a typical year,
such as vacations, automobile repairs, and holiday gifts. Planning
for these expenses helps you create a more accurate budget.
)
odd lot
( A
block of fewer than 100 shares. Odd lots usually involve higher
proportional transaction costs than round lots. )
OFX (Open Financial
Exchange, a standard for the secure exchange of financial data over
the Internet between financial institutions and Web users.
)
On Balance Volume
(OBV) ( A popular momentum indicator developed by Joseph
Granville that tracks whether volume is flowing into or out of a
security. When the security closes higher than the previous close,
all of the day's volume is considered up-volume. When the security
closes lower than the previous close, all of the day's volume is
considered down-volume.
OBV is calculated by assigning a positive or negative value to the
day's volume depending on whether prices closed higher or lower
that day. A running total is kept by adding or subtracting the
result from the current total.)
Online Bill Payment
(A
service that lets you electronically pay bills from within Money.
Electronic payments (Epays) and automatic payments (Apays) are
examples of online bill payments. )
online quotes
(Investment prices (for stocks, for example) that are
updated from the Internet. )
online services
(Services provided by your bank or brokerage for common
banking tasks, such as paying bills, over the Internet.
)
open (The price paid
in a security's first transaction of the current trading day.
)
open-end fund
( A
fund that is open to new investors and in which both new investors
and existing shareholders may purchase as many shares as they want.
Most mutual funds are open-ended. )
opening balance
(The beginning balance for a Money account, before you
enter any transactions. )
open interest
(
The number of contracts outstanding for a given option or
commodities future. It measures how much interest there is in a
particular option or future. )
open market
operation ( A means of conducting Monetary Policy that is used by
the Federal Reserve. It involves the purchase and sale of
government securities by the Federal Reserve Bank of New York to
regulate the money supply. This alters bank reserves, which affects
the supply of credit. )
operating gains or
losses ( Business revenue minus expenses before interest
payments and income tax deductions. )
operating
activities ( A company's ongoing business operations. Cash flow
from operating activities does not include cash from asset sales or
other extraordinary items. )
operating income or
loss ( A firm's earnings from its normal operations, minus
the everyday costs of those operations. )
operating profit
(
See gross profit. )
operating ratio
(
The ratio of operating costs to sales, or the inverse of the profit
margin. )
option (The right to
buy or sell a stock at a given price (the strike price) during a
given period. An option to buy a stock is a call; an option to sell
a stock is a put. Employee stock option grants are typically calls.
)
other current
assets ( An asset category that includes prepayments, deferred
charges, and amounts (other than trade accounts) due from parents
and subsidiaries. Also includes any other current assets that are
not assigned to cash and cash equivalents, receivables, or
inventories. )
other current
liabilities ( Liabilities not assigned to short-term debt or
accounts payable. )
other financing
charges, net ( Finance charges other than those assigned to
issuance of debt, issuance of capital stock, repayment or long-term
debt, repurchase of capital stock, or payment of cash dividends.
)
other gains or
losses ( Gains or losses from an event that is uncontrollable
but not extraordinary, such as an earthquake if the company is in
California. )
other income (net)
(Non-operating revenues after related expenses.
)
other investing changes
(net) ( Any investing items not assigned to purchases, selling
of fixed assets, or investments. )
other non-cash
items (Expenses that do not involve cash outflow, other than
depreciation or amortization. )
other taxes
(
Generally, taxes other than income taxes (not including excise
taxes, which the company does not actually pay, but only collects
on behalf of the government). )
out-of-the-money
option ( An option with no intrinsic value. A call is out of
the money when the strike price is higher than the current market
value of the underlying security. A put is out of the money when
the strike price is lower than the current market value of the
underlying security. )
overall rank
( A
Value Line ranking that is calculated separately for each of three
broad categories: equity and partial-equity funds, taxable
fixed-income funds, and municipal bond (tax-free) funds.
Value Line bases overall rank on three factors: five- and one-year
growth persistence in fund returns and three-year risk-adjusted
performance. Growth persistence rewards funds for consistency
outperforming other stocks in their group, not for the magnitude of
their outperformance. The three-year risk-adjusted performance is a
fund's three-year total return divided by its standard deviation.
After these three measures are combined into a total score for each
fund, the funds are ranked from 1 (highest) to 5 (lowest).
)
overbought
( A
condition in which it appears that a stock has reached a price peak
and is now likely to retreat. )
overhead resistance
(A
condition in which a stock appears to have a price ceiling. Every
time the stock approaches overhead resistance, the price goes down.
)
oversold
( A
condition in which it appears that a stock has declined to the
point where the selling is over and buyers will likely step in and
push the stock higher. )
over-the-counter market
(OTC) ( All U.S. stocks not traded on any of the major
exchanges. OTC stocks are traded by telephone or computer and tend
to be newer, smaller, and riskier than exchange-listed stocks.
)
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P
Pacific-Asia stock
excluding Japan ( A Morningstar category for
international equity funds that have at least 75 percent of their
stock holdings in Pacific-Asia companies, specifically excluding
investments in Japan. )
Pacific Exchange
(PCX) ( A major regional exchange with trading floors in both
Los Angeles and San Francisco. PCX is the third largest exchange in
the United States and the third largest stock options exchange in
the world. )
par value
(
The face value of a bond or for a share of preferred stock. Par
value is the basis for the interest payment (for a bond) or
preferred dividends (for stock). )
passive loss
deductions ( Losses from trades or businesses in which the
taxpayer not actively involved, such as investment portfolio
losses. Passive loss deductions are subject to limitations.
)
pay date
(
The date a company will issue a previously announced dividend and
mail checks to shareholders who owned the stock on the record date.
)
payee (A person or
business to whom you write a check or make some other kind of
payment.)
payment of cash
dividends ( Includes cash payments of common and preferred
dividends to the shareholders. Preferred dividends are the amounts
required for the current year only and not for any amount in prior
years. )
payout ratio
(
The latest indicated annual dividend rate divided by the latest 12
months' earnings per share (EPS). It indicates the amount of
earnings paid out in dividends. )
PEG ratio
(
The price/earnings (P/E) ratio divided by expected per-share
earnings growth over the coming year. A value of less than 1
implies that the stock could be undervalued; more than 1 implies
that it is overvalued. )
penny stock
(A
highly speculative stock that doesn't trade on any of the major
exchanges. The share price typically is less than $1.)
P/E ratio (1 month
ago) ( The closing price one month ago divided by the latest
12 months' earnings per share (EPS). )
P/E ratio (1 year
ago) ( The closing price one year ago divided by the latest
12 months' earnings per share (EPS). )
P/E ratio (5-year
average) ( The arithmetic average of the last five fiscal
year-end P/E ratios. )
P/E ratio (5-year
high) ( The highest P/E ratio for the company over the past
five fiscal years. )
P/E ratio (5-year
low) ( The lowest P/E ratio for the company over the past
five fiscal years. )
P/E ratio (6 months
ago) ( The closing price six months ago divided by the latest
12 months' earnings per share (EPS). )
P/E ratio
(
See price/earnings ratio. )
pension
(A
type of retirement plan that is funded by an employer.)
percent bond
(
The percent of a mutual fund that is composed of bonds, including
fixed-income securities with a maturity of more than one year.
)
percent cash
(
The percent of a mutual fund that is composed of cash and cash
equivalents (fixed-income securities with a maturity of one year or
less). Negative cash percentages indicate that a portfolio has
borrowed money or used other techniques to leverage the market.
)
percent change
(The percentage difference between the preceding day's
closing price and the current price. Note: Prices are usually
delayed by at least 20 minutes.)
percent gain
(
The gain or loss on a security or portfolio, expressed as a
percentage of its original cost. )
percent giant
capitalization ( The percentage of a mutual fund
that is invested in companies with a market capitalization of more
than $25 billion. )
percent institutional
ownership ( The proportion of outstanding shares held by mutual
funds, pension funds, and other big institutional investors.
)
percent large
capitalization ( The percentage of a mutual fund
that is invested in large-cap companies. Large-cap stocks are those
that account for the top 70 percent of the market capitalization of
Morningstar domestic stocks. )
percent medium
capitalization ( The percentage of a mutual fund
that is invested in mid-cap stocks. Mid-cap stocks are those that
account for the bottom 10th to 30th percentile of the market
capitalization of Morningstar domestic stocks. )
percent micro
capitalization ( The percentage of a mutual fund
that is invested in companies with a market capitalization of less
than $250 million. )
percent net assets
(
The proportion of a fund's net assets that is made up by each of
its leading holdings. Morningstar calculates this by dividing the
market value of the security by the fund's net assets. )
percent of
portfolio ( The percentage of a portfolio's total value that is
accounted for by a security or account. )
percent other
(
The percentage of a mutual fund that is composed of holdings other
than stocks, bonds, or cash. This can include preferred stocks
(equity securities that pay dividends at a specified rate),
convertible bonds, convertible preferreds, warrants, and options.
)
percent price
change ( The change in a stock price over a period of time, as
a percent of the beginning price. )
percent price change 1
week ( The percent change in a stock price from the previous
Friday's closing price to the previous day's closing price.
)
percent price change
last 6 months ( The percent change in a stock price from the
closing price on the last day of the month six months ago to the
previous day's closing price. )
percent price change
last month ( The percent change in a stock price from the Friday
closing price four weeks ago to the previous day's closing price.
)
percent price change
last quarter ( The percent change in a stock price from the
closing price on the last day of the month three months ago to the
previous day's closing price. )
percent price change
last year ( The percent change in a stock price from the closing
price on the last day of the current month one year ago to the
previous day's closing price. )
percent price change
year to date ( The percent change in a stock price from the
closing price on the last day of the previous year to the previous
day's closing price. )
percent small
capitalization ( The percent of a mutual fund that
is invested in small-cap stocks. Small-cap stocks are those that
account for the lowest 10 percent of the market capitalization of
Morningstar domestic stocks. )
percent stock
(
The percentage of a mutual fund that is composed of common stock.
)
personal income
report ( A government report that measures income from all
sources. The largest component of total income is wages and
salaries, a figure that can be estimated by using payrolls and
earnings data from the employment report. There are many other
categories of income, including rental income, government subsidy
payments, interest income, and dividend income. )
Philadelphia Fed
Index (An index released each month by the Federal Reserve
Bank of Philadelphia that offers a snapshot of manufacturing
activity in the bank's district. It is the first of several
regional manufacturing reports issued each month. )
PIN (Personal
identification number.)
pink sheets
(
Daily listings of price quotations for thousands of
over-the-counter securities that are not traded on the major
exchanges, published on pink paper by the National Quotation
Bureau. An electronic version of pink sheets is known as the OTC
Bulletin Board. )
point (A sum equal to
1 percent of a loan amount. The borrower pays it to the lender,
often for a lower interest rate on the loan.)
portfolio
(A
collection of securities held by an individual.)
portfolio turnover
( A
measure of how much or how often a fund is buying and selling. This
figure is computed by taking the lesser of purchases or sales
(excluding all securities with maturities of less than one year)
and dividing by average monthly assets. The resulting percentage
loosely represents the percentage of the portfolio's holdings that
have changed over the past year. )
position tracking
(Following your stake in various
investments.)
pound ( The national
currency of the United Kingdom. )
power of attorney
( A
document authorized by a person, called the principal, that grants
legal authority to another person, the agent, to act on behalf of
the principal. A power of attorney can authorize the agent to write
checks, sell property, file tax returns, and so on. Under a
"durable" power of attorney, the principal authorizes the agent to
make decisions (including health-care decisions) on his or her
behalf in the event the principal is incapacitated. )
preferred dividends
(
The total value of the current dividend requirement on issued
preferred stock of the parent company for the current year.
)
preferred stock
(A
class of stock that typically pays a fixed dividend and gives its
holder claim to earnings and assets before the owners of common
stock.)
preferred stock
equity (Equity from the preferred stock of the parent company.
Preferred stock equity usually equals the number of preferred
shares issued (minus any preferred shares in the treasury)
multiplied by par value. )
pre-tax margin
(
The latest 12 months' pre-tax income divided by the latest 12
months' sales. )
previous close
(A
security's price at the end of the previous day's trading
session.)
price (A security's
current asked market value, or the amount paid to buy one unit of a
security.)
price appreciation
(
Market value minus investor's cost, or how much an investment has
increased in price or value. )
price/asset ratio
(
The closing price divided by total assets. )
price/book value
(
The latest closing price of a stock divided by the most recent
quarter's book value per share. Also known as the price/equity
ratio. )
price/cash flow
ratio ( Closing price divided by cash flow per share from the
last 12 months. It is similar to the P/E ratiobut does not take
into account depreciation and other non-cash charges. )
price channel
(A
margin defined by upper and lower lines that typically show the
trailing 20-day high and 20-day low. Using the price channel
strategy, you buy when the weekly closing price moves up to a new
20-period high, and you sell or sell short when the weekly closing
price moves down to a new 20-period low. )
price earnings ratio
(P/E) (A stock's latest closing price divided by the latest 12
months' earnings per share. The P/E ratio is the most common way of
measuring how expensive a stock is. The higher the P/E ratio, the
more investors are willing to pay for it.)
price/earnings
(portfolio) ( The weighted average of the price/earnings (P/E)
ratios of the stocks in a mutual fund's portfolio. )
price/sales ratio
(
The latest closing price of a stock divided by the previous 12
months' sales per share, often seen as an indicator of a company's
prospects. )
primary EPS from
continuing operations ( The latest four quarters of
earnings per share from continuing operations divided by the number
of shares outstanding. )
primary EPS from
discontinued operations ( The latest four quarters of
earnings per share from discontinued operations divided by the
number of shares outstanding, not including income from
extraordinary gains and losses. )
primary EPS from total
operations ( The sum of the previous four quarters of primary
earnings per share (EPS) from continuing operations and the primary
EPS from discontinued operations divided by the number of shares
outstanding. )
prime rate
(The interest rate that banks charge their biggest and
best customers for short-term loans. It is an indicator of the
general direction of interest rates.)
principal
(The amount still owed on a loan. Also, the part of a
loan payment that reduces the loan's outstanding
balance.)
probate
(
The court process in which a deceased person's estate is
administered, whether or not the person had a will. The process
includes the appointment of a representative, notice to creditors,
inventorying the estate, and distributing the estate according to
the deceased person's will or according to the law if there is no
will. )
Producer Price Index
(PPI) ( A measurement of changes in the wholesale prices of
products purchased by manufacturers, used as one indicator of
inflation. )
productivity
(
The rate of output per unit of input. Usually reported as labor
productivity, or the amount of product per hour worked.
)
productivity report
( A
government report that measures the productivity of non-farm
workers and the costs associated with producing a unit of output.
)
profit and loss
statement (A report that shows the income, expenses, and net
profit of a business for a specific period of time.)
profit margin
(The ratio of profit (gross profit, operating profit, or
net profit) to sales, expressed as a percentage of
sales.)
program trading
(
Computerized trading undertaken by large institutions to exploit
differences in price between expiring stock index futures and the
underlying stock when both ought to be equal. )
projected expenses for
$1,000 purchase (The amount an investor would expect
to pay in expenses, including sales charges (loads) and fees, over
the next 3, 5, and 10 years, assuming a $1,000 investment that
grows by 5 percent each year with redemption at the end of each
time period. )
property, plant, and
equipment, gross ( The original purchase price of the
fixed assets of a company. )
property, plant, and
equipment, net ( Company assets that are of a
relatively permanent nature and are not intended for resale,
calculated as cost minus accumulated depreciation and amortization.
)
prospectus
(A
document issued by a company that is about to sell stock to the
public. It includes financial, legal, and risk
information.)
proxy ( Authority to
act for another, or the person with the power to do so. In
investming, a proxy is solicited from shareholders so that
management can vote their shares. A proxy statement is a document
sent to shareholders annually that discloses issues up for
shareholder approval and how much top managers are paid.
)
PSE ( See Pacific
Exchange (PCX). )
PSR ( See
price/sales ratio. )
public short ratio
( A
technical indicator that shows the relationship between the number
of public short sales and the total number of short sales.
)
purchase
constraints ( Limits on the purchase of shares in a fund.
)
purchase of property,
plant, equipment ( Capital outlays to increase,
construct, or improve capital assets. )
purchase of short-term
investments ( Items not assigned to purchases, selling of fixed
assets, or investments. )
put ( An option
that grants the right to sell a given stock at a given price (the
strike price) during a given period of time. The put holder profits
if the market price goes below the strike price. )
put/call ratio
(
Volume of put options divided by the volume in call options. A high
ratio (put volume much higher than call volume) indicates a bear
market. )
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Q
qualified fund
(A
fund-such as an employee pension plan, a 401(k) plan, or a 403(b)
plan-that is offered through a retirement plan that meets IRS
requirements so participants can deduct contributions from taxable
income. Denoted by an A under the Purchase Constraints column.
)
quantity
(The number of shares purchased or tracked for a given
security. )
quick ratio
(
The sum of cash and receivables from the most recent quarter
divided by the total current liabilities from the most recent
quarter. Also called the Acid Test Ratio. )
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R
rand ( The national
currency of South Africa. )
rating (The
Morningstar fund rating uses a scale of 1 (lowest) to 5 (highest)
stars to rank a fund's risk-adjusted return on investment in
comparison to other funds in its Morningstar category.)
random-walk theory
(The theory that it is futile to try to predict where
the market or an investment is going. )
Real Estate Investment
Trust (REIT) ( A company that manages a portfolio of real estate
investments. )
realized gain or
loss (The profit or loss received from the actual sale of an
asset. )
real return
(
The return on an investment adjusted for inflation. )
receivables
(
Total accounts receivable, less any provision for bad debts.
)
receivable turnover
(
The latest 12 months' sales divided by the average receivables from
the latest two quarters. It measures the number of times, on
average, that receivables are collected during a given period.
)
recent quarter surprise
percent ( See earnings surprise. )
reconcile
((Advanced Account Register only) See Balance (to
balance an account). )
reconciled
transaction ((Advanced Account Register only) A downloaded
transaction that you confirmed to be correct when you balanced your
account. A letter R in the C
(Cleared) column indicates a reconciled transaction. )
record date
(
The date by which you must own a stock to receive an announced
dividend. )
recurring
transaction (A payment, deposit, transfer, or investment purchase
that occurs at specific freqency, such as monthly or every two
weeks.)
Redbook survey
( A
chain-store sales index that tracks 15 retail stores every week to
determine the change in month-to-date sales. )
redemption fee
(
An amount charged when money is withdrawn from a mutual fund before
a certain time limit. )
red herring
( A
preliminary prospectus issued by stock-underwriting firms to
measure investor interest in a prospective stock offering. The
document must contain a warning, printed in red, that the document
does not contain all the information normally required by the
Securities and Exchange Commission and that some parts may be
changed before the final prospectus is issued to the public.
)
regional funds
(A
mutual fund that focuses on companies from a particular part of the
world or (less often) companies headquartered in or focused on a
particular part of the United States. )
registered
representative (A stockbroker. All stockbrokers must
register with the National Association of Securities Dealers before
they can buy and sell securities for their customers. )
reinvestment
(Purchasing more shares of an investment with interest
or dividend payments from that investment.)
REIT ( See Real
Estate Investment Trust (REIT). )
relative strength
(A
ranking of the price performance of a stock in comparison to all
other stocks on a scale of 1 to 100, with 100 being best.
)
Relative Strength Index
(RSI) (A ranking of the current strength of a stock's price
relative to its past performance. RSI readings above 70 indicate
that the shares are overbought and the price is likely to start
falling. Readings below 30 indicate that the shares are oversold
and a rally can be expected.)
repurchase of capital
stock (The buying back of common and preferred stock for the
corporate treasury. )
research and
development costs (R&D costs) ( Spending on the development
of new products (or new knowledge) or on improving existing
products. )
resistance level
(A
price point that buyers appear to be unwilling to go above. The
trading range between the support level and the resistance level is
known as the channel. )
Retail Sales Index
( A
government index that measures the total receipts of retail stores.
It is widely followed as the most timely indicator of broad
consumer spending patterns. )
retail sector
( A
category that includes all retail companies. )
retained earnings
(
The portion of net income retained for reinvestment in the company,
rather than being paid in dividends to shareholders. )
retirement account
(An
account, usually tax-deferred, designed to provide savings for
retirement. Examples include 401(k) and IRA accounts.)
return (The rate of
return from a mutual fund investment, expressed as a percentage. It
is calculated as the value per share of a mutual fund's price
appreciation plus income distributions, divided by the fund's net
asset value. )
return of capital
(A
distribution from an investment that is not income but a return of
a part of your original investment.)
return on assets
(ROA) (The rate of return from a mutual fund investment,
expressed as a percentage. It is calculated as the latest 12
months' net income divided by the total assets from the most recent
quarter. )
return on capital
(
See return on invested capital. )
return on equity
(ROE) ( The latest 12 months' net income divided by the common
stock equity. It can be measured by using the equity at the end of
the last quarter or the average value of the equity over the year.
It is the most widely used measure of how well a company is
performing for its shareholders. )
return on investment
(return on invested capital)(ROI) ( Latest 12-months' net income
divided by invested capital (long-term debt plus common stock
equity and preferred equity). The invested capital can be the
figure at the end of the quarter or the average over the year.
)
return on sales
(
Net income as a percentage of sales. )
revenue
(All income received by a company during a given period,
including income from sales, interest received, and proceeds from
the sale of a subsidiary.)
revenue/employee
(
Revenue divided by total employment at a firm. The ratio is an
indication of how labor-intensive a business is. )
revenue growth
(The compound annual growth rate of a company's
revenues.)
revenue growth quarter
vs. quarter ( The rate at which revenue grew from a quarter in
the last year to the most recent quarter. )
revenue growth year vs.
year ( The rate at which revenue grew from the previous
12-month period to the most recent one. )
revenue growth YTD vs.
YTD ( The rate at which revenue grew from the year-to-date
period of the previous year to the same period in the current year.
)
revenue/share
(
Revenue divided by shares outstanding. This figure indicates the
revenue multiple that investors are willing to pay for the stock.
)
risk (The
possibility that a security will lose value.)
risk rank
( A
Value Line measure of a mutual fund's volatility based on its
standard deviation over a three-year period. Standard deviation
accounts for positive and negative returns equally, indicating
potential swings in a fund's performance. The most volatile, or
risky, funds have a risk rank of 5.)
risk tolerance
(The ability of an investor to tolerate uncertainty
about the safety and returns of an investment. Investors with very
high risk tolerance are comfortable buying investments such as
futures contracts; investors with very low risk tolerance prefer
safer investments such as bonds, even if that means accepting lower
returns. )
ROA ( See return on
assets (ROA). )
ROE ( See return on
equity (ROE). )
ROI ( See return on
investment (ROI). )
rollover
(For retirement plans such as IRAs, the tax-free
reinvestment of a distribution from one qualified retirement plan
into another.)
Roth IRA
(Type of Individual Retirement Arrangement (IRA).
Contributions do not reduce current taxable income, but withdrawals
after retirement are tax-free.)
r-squared
(
An indicator that ranges from 0 to 100 and tells what percentage of
a fund's movements are explained by movements in its benchmark
index.
An r-squared of 100 means that all movements of a fund are
completely explained by movements in the index. Thus, an index fund
that invests only in S&P 500 stocks has an r-squared very close
to 100. Conversely, a low r-squared value indicates that very few
of the fund's movements are explained by movements in its benchmark
index.)
rule 12(b)1
( A
Securities and Exchange Commission rule that allows mutual fund
companies to add an annual charge for marketing and distribution;
also, shorthand for the fee that funds charge under this rule.
)
rule of 72
( A
quick way to determine how long it take for an investment to double
in value. To use the rule of 72, simply divide 72 by the percentage
yield of the proposed investment. For example, an investment that
yields 12 percent annually will double its value in six years.
)
rupee ( The national
currency of India. )
Russell 2000 Stock
Index ( A broad measure of small-stock performance, consisting
of the largest capitalization U.S. stocks except for the largest
1,000. It is often used as a performance benchmark for small-cap
mutual funds. )
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S
sale of property,
plant, equipment ( Includes proceeds from selling any
fixed assets such as property, plant, and equipment. )
sale of short-term
investments ( Includes profit received from selling short-term
marketable securities. )
sales (On a company's
financial statements, all net sales of a company plus any other
revenues associated with the main operations of the business. Sales
do not include dividends, interest income, or non-operating income.
)
sales growth (annual
vs. one year ago) ( The percent change between current
annual sales and sales one year ago. )
sales (1-year growth
rate) ( The year-to-date percent change in sales. )
sales (5-year
growth) ( The compound annual growth rate of sales over a
five-year period. )
sales (last 12
months) ( The sum of sales for the last four quarters.
)
sales/employee
(
The latest 12 months' sales divided by the most recent number of
employees. )
sales growth (qtr. vs.
1 year ago) ( The percent change between current quarter sales
and the same quarter one year ago. )
sales/share
(
The latest 12 months' sales divided by the number of shares
outstanding. )
S&P
(
See Standard & Poor's (S&P). )
S&P 500
(
See Standard &Poor's 500 Stock Index (S&P 500).
)
S&P 500 index
membership ( Inclusion in the Standard & Poor's 500 Stock
Index (S&P 500). )
savings bonds
(Small-denomination bonds that are issued and backed by
the federal government. )
schedule
(In
Money, to set up a regularly occurring transaction, such as a
withdrawal, deposit, or transfer. Also, to submit an online
payment. )
Schedule A
(An
IRS form used to itemize deductions and calculate the total
deductible amount. )
Schedule C
(An
IRS form used to calculate the profit and loss from a sole
proprietorship. )
Schedule D
(An
IRS form used to list the capital gains and losses from
investments. )
screen (A way to
search online for stocks that meeti a given set of criteria. For
instance, you could screen for companies that have market caps
above $500 million, returns on equity exceeding 20 percent a year
for five years, and dividends exceeding 2 percent. )
SEC ( See
Securities and Exchange Commission (SEC). )
sector ( A specific
part of the economy that includes companies in the same, or closely
related, industries. )
sector weightings
(
The percentage breakdown of a mutual fund's portfolio into various
stock and bond categories. )
Securities and Exchange
Commission (SEC) ( The federal agency that oversees
and regulates U.S. securities markets. )
security
(An
investment that can be easily traded, such as stocks, bonds, mutual
funds, or options. Also, the collateral that secures a loan (for
example, a car is the security for a car loan). )
sellers
(For equities, the total number of institutional owners
who decreased their positions and the aggregate number of shares
discounted from their positions. )
selling, general and
administrative expenses ( An expense category that includes
all salaries, indirect production, marketing, and general
corporation expenses. )
selling short
(
Sale of a security or future not owned by the seller to take
advantage of an anticipated decline in the market or to protect a
profit on shares actually owned. )
Simplified Employee
Pension (SEP or simple-IRA) ( A type of Individual Retirement
Arrangement (IRA), most often used by sole proprietors and owners
of small businesses, that has higher contribution limits than a
traditional or Roth IRA. )
services sector
( A
category that includes media, entertainment, personal and business
services, waste management, and transportation companies.
)
shareholder's
equity ( The net worth of a company, calculated as assets minus
liabilities. Also known as book value. The actual value of a
company is usually always higher than this amount. )
shares outstanding
(
The total number of a company's publicly traded shares.
)
Sharpe ratio
( A
measure of how well a mutual fund rewards risk. A higher Sharpe
ratio indicates better risk-adjusted performance. The ratio is
calculated as the fund's average monthly return minus the average
monthly return of the 90-day Treasury bill (over 36 months),
multiplied by 12 and then divided by the standard deviation of the
fund's annualized excess returns. )
short ( See selling
short. )
short covering
(
Buying back stock that has already been sold short. )
short interest
ratio ( Shares sold short divided by average daily volume.
This ratio represents the number of days of average trading needed
to cover short positions. )
short interest
shares ( The number of shares of a stock that have been sold
short but not yet repurchased. )
short sale
(
See selling short. )
Short-Term Bond
fund ( A Morningstar category for taxable bond funds that
invest at least 70 percent of their assets in bonds with a focus on
corporate and investment-grade bonds. These bonds have an average
duration of 1 to 3.5 years or an average effective maturity from 1
to 4 years. To be classified as a bond fund by Morningstar, at
least 70 percent of all assets must be invested in bonds.
)
short-term debt
(
Debt that must be paid in the near future (usually one year).
)
Short-Term Government
fund ( A Morningstar category for taxable bond funds that
invest at least 80 percent of their bond portfolio in
government-issued bonds. These bonds have an average duration from
1 to 3.5 years or an average effective maturity of 1 to 4 years. To
be classified as a bond fund by Morningstar, at least 70 percent of
all assets must be invested in bonds. )
sinking fund
( A
special reserve account created by a bond issuer to help protect
bondholders from default. The issuer promises to put money into the
account at regular intervals and to use the cash that accumulates
to redeem the bonds. )
size of last sale
(
The most recent quantity of shares traded. )
Small Blend
( A
Morningstar category for domestic equity funds that invest in a
mixture of small companies whose share prices are expected to
increase (growth stocks) and small companies whose share prices are
priced below the market (value stocks). Morningstar classifies
small-cap stocks as those that account for the lowest 10 percent of
the market capitalization of Morningstar domestic stocks.
)
small cap
(
Classification of stocks that have the lowest market
capitalization, or the funds that invest in those stocks.
Morningstar classifies small-cap stocks as those that account for
the lowest 10 percent of the market capitalization of Morningstar
domestic stocks. )
Small Growth
( A
Morningstar category for domestic equity funds that invest in small
companies whose share prices are expected to increase
significantly. Morningstar classifies small-cap stocks as those
that account for the lowest 10 percent of the market capitalization
of Morningstar domestic stocks. )
Small Value
( A
Morningstar category for domestic equity funds that invest in small
companies whose shares are priced below the market compared to
their peers. Morningstar classifies small-cap stocks as those that
account for the lowest 10 percent of the market capitalization of
Morningstar domestic stocks. )
socially responsible
funds ( Mutual funds whose investing strategy is driven by
social and ethical goals (in addition to financial goals), such as
environmental cleanup, health-care provision, or avoidance of
companies involved in tobacco, weapons, or other controversial
industries. )
soldout positions
(
Total number of institutional owners of an equity that closed their
positions and the aggregate number of shares they sold.
)
special
income/charges ( Income charges that are either
infrequent or unusual, but not both. )
Specialty-Financial
( A
Morningstar category for domestic equity funds that invest
primarily in financial-services companies, such as banks, brokerage
firms, and insurance companies. )
Specialty-Health
( A
Morningstar category for domestic equity funds that invest
primarily in health-care companies, including drug manufacturers,
hospitals, and biotechnology firms. )
Specialty-Natural
Resources ( A Morningstar category for domestic equity funds that
invest primarily in companies involved in the exploration,
distribution, or processing of natural resources. )
Specialty-Precious
Metals ( A Morningstar category for domestic equity funds that
invest primarily in exploration, mining, or processing of gold,
silver, and other precious metals. )
Specialty-Real
Estate ( A Morningstar category for domestic equity funds that
invest primarily in real-estate–related securities. )
Specialty-Technology
( A
Morningstar category for domestic equity funds that invest
primarily in companies engaged in the development, distribution, or
servicing of technology-related equipment or processes.
)
Specialty-Unaligned
( A
Morningstar category for domestic equity funds that invest in a
single industry or sector other than those described by other
specialty categories. )
Specialty-Utilities
( A
Morningstar category for domestic equity funds that invest in
public utilities, including electric, gas, and telephone service
providers. This category also includes funds that invest primarily
in global communications. )
spin-off
(Creation of a new company from part of an existing
company. )
split (The division
of each share of a security into two or more shares, with the price
adjusted so that the total value of the shares remains the same.
)
split transaction
(A
transaction (withdrawal, deposit, or transfer) whose total amount
you divide among two or more categories. )
spread trading
(
The practice of buying one option contract and selling another for
the same underlying investment at the same time. The difference
between the profit from one transaction and the loss on the other
is the spread. )
Standard &
Poor's (An investment advisory company with several functions,
including the maintenance of the S&P 500, a widely followed
benchmark of stock market performance. S&P is also an important
bond rating agency, and it sells data on companies and publishes
reports and newsletters. )
S&P 500
(A
widely followed stock index composed of 500 companies, including
industrial firms, financial companies, utilities, and
transportation companies. )
standard deduction
(A
set amount that the IRS lets you deduct from taxable income if you
don't calculate (itemize) your actual expenses in certain
categories. The amount is adjusted annually for inflation.
)
standard deviation
( A
statistical measure of volatility. A mutual fund that has a high
standard deviation has a greater potential for volatility, or
significant swings in value. )
statement
(Bank or brokerage records of transactions processed in
your accounts. Statements can be on paper, or they can be
downloaded or imported from your bank's Web site. )
statement of cash
flow (A basic financial statement that shows a company's
sources and uses of funds. Sources of cash include net income,
depreciation, and reductions in inventory. Uses of cash include
dividends declared as well as increases in current assets.
)
stochastic
oscillator ( A technical indicator of overbought and oversold
conditions in a stock, based on moving averages and relative
strength. The simplest form is expressed as a percentage of the
difference between the high and low price of a stock in a given
period. )
stock (An ownership
share or interest in a corporation. )
stockbroker
(
An individual registered with the National Association of
Securities Dealers (NASD) who is authorized to buy and sell
securities on behalf of customers. )
stock certificate
( A
document that proves ownership of shares in a particular company.
For common stock, certificates are often not issued but are instead
held by the brokerage firm. )
stock option
(
See option. )
StockScouter
fundamental grade ( StockScouter rates companies on a
five-letter scale from A to F (excluding E) on their earnings
growth trends. Grades represent a weighted combination of
companies' earnings growth momentum, analysts' recent revisions of
future earnings estimates, and recent actual earnings surprises.
)
StockScouter ownership
grade ( StockScouter rates companies on a five-letter scale
from A to F (excluding E) on recent insider and institutional
ownership trends. Grades represent a weighted combination of
significant buying and selling by high-level executives, board
directors, major shareholders, and large financial institutions.
)
StockScouter rating
(The MSN Money StockScouter rating, which reflects an
assessment of expected return and price volatility. The highest
rating is 10, indicating a stock with strong expected returns and
low volatility. )
StockScouter sector
(One of 12 industrial sectors, used by StockScouter to
determine which sectors are likely to be favored by investors over
the next one to three months. Stocks are sorted into sectors based
on their primary business. )
Stockscouter size
(
Size, or market capitalization, calculated as the number of a
company's shares outstanding multiplied by the stock price.
StockScouter sorts companies into four capitalization groups, from
large to micro. )
StockScouter style
(Growth style or value style, as determined by
StockScouter. Growth stocks tend to have higher than average
price-earnings and price-sales ratios; value stocks tend to have
lower ratios. )
StockScouter technical
grade (StockScouter rates companies on a five-letter scale
from A to F (excluding E) based on recent price trends of company
stock. Grades represent a weighted combination of a stock's 120-day
relative strength index and the relationship to the stock's 50-day
moving average. )
StockScouter valuation
grade ( StockScouter rates companies on a five-letter scale
from A to F (excluding E) on their valuation trends. Grades
represent a weighted combination of companies' price-earnings
ratio, price-sales ratio, and price-earnings/growth (PEG) ratio.
)
stop loss order
(
An instruction to your broker to close out your short position-that
is, to buy stock to replace the shares you borrowed-if your losses
reach a certain percentage of your investment. )
stop order
( A
standing order to sell a security when it reaches certain price,
which can be higher or lower than the current price. )
straddle
(
The purchase or sale of an equal number of puts and calls on an
underlying stock, with the same strike price and expiration date.
The investor who purchases or sells a straddle seeks to profit from
moderate changes in the price of the underlying stock, regardless
of whether the price goes up or down. )
Straits Times
Industrials ( A benchmark index that tracks the performance of
the Stock Exchange of Singapore. Also called the ST Industrials.
)
strangle
(
The purchase or sale of an equal number of puts and calls on an
underlying stock, with the same expiration date but different
strike prices. Investors purchase or sell strangles with the hope
of profiting from large changes in the price of the underlying
stock, regardless of whether the price goes up or down.
)
street name
(
The name under which a brokerage firm holds the securities of its
customers. Most brokerage companies hold their customers'
securities in the firm's street name rather than in the name of
each individual customer. )
strike price
(
The price specified in an option contract. For a call, it's the
price at which the option holder can buy a stock; for a put, it's
the price at which the option holder can sell the stock.
)
Student Loan Marketing
Association (Sallie Mae) ( A publicly traded corporation that
provides federal and private student loans. It was created as a
government-sponsored entity, but it severed its ties to the federal
government in 2004. )
subcategory
(A
subset of an income or expense category. For example, Gasoline and
Maintenance could be subcategories of Automobile expenses.
)
subclass
(A
subset of a class. For example, if you own rental property, you
might set up "Maple Street condominium" as a class and Water,
Maintenance, and Electricity as subclasses. )
support level
( A
level below which a stock will not fall. The trading range between
the support level and the resistance level is known as a channel.
)
symbol (A unique,
market-approved code that identifies a particular security on an
exchange. The symbol generally reflects the name of the security.
Also known as the ticker symbol. )
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T
target price
(
The price that one hopes a given security will reach. Also, a
predetermined signal to buy or sell a stock. )
tax bracket
(A
range of incomes that are taxed at a specific marginal rate.
)
tax-deferred
(Subject to tax in a later year, not in the year the
investment is made or earns income. Tax-deferred investments are in
contrast to tax-exempt investments, which are never taxed.
Traditional IRAs and 401(k) plans are examples of tax-deferred
savings plans. )
Tax Estimator
(The Money feature that helps you estimate your tax
liability based on the financial information that you track in
Money. )
tax withholding
(Federal, state, and local income taxes that are taken
out of your wages or other income and deposited into an IRS
account. )
technical analysis
(Predicting future stock performance by examining
trading patterns in prices and volumes and comparing them with past
patterns. Charting techniques, such as Bollinger bands or moving
average lines, are often part of technical analysis. Contrast with
fundamental analysis. )
technical analyst
(A
person who forecasts price movements by examining and charting the
patterns formed by price history, trading volume, the ratio of
advancing stocks to declining stocks, and other technical data.
)
technical
correction ( See technical analysis. )
technical indicator
(
Any of the patterns or measures used in technical analysis, such as
Bollinger bands, moving average analysis, or stochastic
oscillators. )
technology sector
( A
category that includes computer hardware, software, electronics,
electrical equipment, and wireless-communications companies.
)
tender offer
(
An offer from a company to shareholders to buy their shares of
stock. The offer may come from the company itself or from another
company that wants to acquire it. )
ticker ( See symbol.
)
time value
(
The portion of an option premium that is attributed to the amount
of time remaining until the option contract expires. Time value is
whatever value the option has in addition to its intrinsic value.
)
title insurance
(An
insurance policy that protects lenders when the title of a property
is challenged for reasons such as fraud. )
today ( The change in
value of a given investment for the current day. )
top-10 holdings
( A
list of a mutual fund's top holdings as a percentage of total
assets. )
total annualized
return ( An investment return projected over a one-year period,
compounded daily. For example, an investment that returns 1 percent
over one month has an annualized return of about 12 percent.
)
total assets
(
Current assets plus non-current assets. )
total common shares
outstanding ( Common shares outstanding as reported by the
company on the 10-Q or 10-K. )
total current
assets ( The sum of cash and equivalents, receivables,
inventories, and other current assets. Total current assets are all
of the assets that are convertible into cash within a short period
of time, usually a year. )
total current
liabilities ( The sum of accounts payable, short-term debt, and
other current liabilities. )
total equity
(
The sum of preferred stock equity and common stock equity.
)
total liabilities
(
The sum of total current liabilities and total non-current
liabilities. )
total liabilities and
stock equity ( The sum of the total liabilities and the
shareholders' equity. )
total net income
(
The sum of income from continuing and discontinued operations plus
all other adjustments for extraordinary items, other gains/losses,
accounting changes, tax loss carryforwards, and special items.
)
total non-current
assets ( The sum of intangibles and other non-current assets.
)
total non-current
liabilities ( The sum of long-term debt, deferred income taxes,
other non-current liabilities, and minority interest. )
total positions
(
Total number of institutional owners and the aggregate number of
shares that they own. )
total return
(
Total amount gained or lost on a security, account, or portfolio,
measured over a specified time period. Total return includes
changes in the investment's value, as well as income from
dividends, interest paid (for bonds), and capital gains
distributions (for mutual funds). )
total shares
outstanding (The total number of shares issued by a company or
fund. )
total stocks
(
The number of different stocks held by a given mutual fund. An
indication of the portfolio's diversification. )
transaction
(A
withdrawal, deposit or transfer of funds, or a purchase, a sale, or
an exchange of a security. )
transaction form
(
The form at the bottom of an Advanced Account Register, used for
entering transactions manually. )
transfer
(
To move money between accounts. )
transportation
sector ( A category that includes companies involved in
transportation by air, water, road, or railroad. )
Treasury budget
( A
government report that presents the monthly Federal Budget Deficit
data. )
Treasury shares
(
Stock that was once outstanding but has since been repurchased by
the company. Treasury stock is generally carried at cost and is not
included in calculations for dividends or earnings per share.
)
triple witching
hour ( The last hour of trading on the third Friday of March,
June, September, and December, when investors rush to unwind their
positions in index options and futures, all of which are expire on
the same day. Triple witching sometimes produces major price
swings. )
trust (A legal
arrangement in which one or more persons (trustees) take title to
property and manage it on behalf of another person
(beneficiary).)
trust deed
( A
legal document that specifies the collateral for a loan and it
gives a lender the right to seize and sell the collateral if the
borrower fails to repay. For a home loan, the collateral is the
home itself. )
TSE 300 Index
( A
benchmark that tracks the performance of the Toronto Stock
Exchange. )
turnover ratio
( A
measure of a fund's trading activity, calculated by dividing the
lesser of purchases or sales (excluding all securities with
maturities of less than one year) by average monthly assets. A
turnover ratio of 100 percent or more does not necessarily suggest
that all securities in the fund's portfolio have been traded. The
turnover ratio loosely represents the percentage of the portfolio's
holdings that have changed over the past year. )
type ( The kind of
security in question, for example a stock or mutual
fund.)
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U
ultrashort bond
fund ( A Morningstar category for taxable bond funds that
invest at least 70 percent of their assets in bonds, with a focus
on short-term government and corporate bonds. Ultrashort bonds have
an average duration or an average effective maturity of less than
one year. These funds specifically exclude investment in
international, convertible, multisector, and high-yield bonds.
)
uncovered call
(
See naked calls. )
uncovered put
(
See naked puts. )
underlying
investment ( The security or commodity to be purchased or sold
when an option contract is exercised. )
underwriter
( A
firm that brings out new securities issues, agreeing to purchase
and resell them. Often a lead underwriter and several other
underwriters will work together on a given issue. )
unearned income
(
Any income-such as dividends, interest, royalties, rental fees, or
capital gains-that does not come from wages, salary, tips, trade in
business, or other employee or self-employment compensation.
)
unit investment
trust ( A kind of mutual fund that holds a fixed portfolio of
bonds. When the bonds mature, the trust is dissolved. )
UPC restricted
( A
type of security for which the Uniform Practice Code (UPC)
restricts short sales. NASD members (brokerage firms) are required
to close out their short sales of these securities 10 days before
the normal settlement date if the security has not been delivered.
)
utilities bond
( A
bond category that includes bonds related to electricity, gas,
nuclear power, dams, and telephone companies. )
utilities sector
( A
category that includes electricity, gas, nuclear power, dams, and
telephone companies. )
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V
value stock
( A
stock that is undervalued by the stock market, based on analysis of
the company's fundamentals. )
variable ratio
investing ( A contrary investing strategy that involves increasing
stock holdings when the market is weak and increasing bond or cash
holdings when the market is strong. )
VAT (Value Added
Tax. In Europe and Canada, a common form of sales tax in which tax
is added each time value is added to a product, not just at the
point of retail sale.)
vehicle sales
(
See auto and truck sales. )
venture capital
(
Capital made available to new companies by investors known as
venture capitalists, who contribute substantial sums. In exchange
for risking their money, the investors hold a large ownership stake
in the company. )
vested value
(The value of retirement benefits or stock options to
which an employee is entitled regardless of continued employment,
usually based on length of service. )
volatility
( A
measure of a security's likelihood of rising or falling sharply
within a short period, often measured by the beta. )
volume ( The total
shares (or other units) of a security traded during the current (or
most recent) trading day. )
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W
W-2 (The form sent
by an employer to each employee and to the IRS to report the
employee's annual wages, payroll deductions, and other tax-related
information.)
W-4 (A form filed
by an employee, which the employer uses to determine how much tax
to withhold from the employee's paycheck.)
warrant
( A
security that allows the owner to buy a certain number of shares of
a stock at some point in the future, generally at a higher price.
For example, you might buy a warrant that gives you the right to
purchase 10 shares of XYZ stock at $50 per share at any time before
January 1 of the following year. Warrants are generally offered in
tandem with a fixed-income security to provide additional incentive
to the buyer. )
watch account
(
An account in the Portfolio Manager that you can use to track
investments that you don't own. )
water/waste sector
( A
category that includes water, sewer, sanitation, irrigation, and
drainage companies. )
wholesale
inventories ( A government report that includes sales and
inventory statistics from the second stage of the manufacturing
process. )
will (A legal
document that you use to direct where you want your legal assets to
go after your death.)
Wilshire 5000 Stock
Index (The popular name for what is now the Dow Jones Wilshire
5000 Composite Index. The index provides a broad measure of trends
in stock prices across the whole of the market. The Dow Jones
Wilshire 5000 consists of approximately 6,500 U.S.-based stocks
traded on the New York Stock Exchange, the American Stock Exchange
and the Nasdaq. )
Windows Live ID
(An
online service that enables you to use your e-mail address and a
single password to sign in to any service or Web site that uses
Windows Live ID.)
working capital
(
Current assets minus current liabilities. A firm's working capital
is the money it has available to meet current obligations (those
due in less than one year). )
World Equity Benchmark
Shares (WEBS) ( Investments that seek to track the performance of
specific Morgan Stanley Capital International Indexes (MSCI) for 17
different countries/regions. WEBS are listed on the American Stock
Exchange and trade like any other listed stock. )
World Stock fund
( A
Morningstar category for international equity funds that seek
diversification by investing in both foreign and domestic stocks.
To be classifed as a world stock fund by Morningstar, a fund must
invest at least 40 percent of its portfolio in foreign stocks and
more than 10 percent in U.S. stocks. )
wrap account
(
An investment account in which the investor receives brokerage and
other investment services for a single, predetermined price,
usually a percentage of assets ranging from 1 to 3 percent.
)
write-down
(
An accounting adjustment that reduces the book value of an asset.
)
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X
Y
year-ago EPS
(
The actual earnings per share for the given year-ago period.
)
yen ( The national
currency of Japan. )
yield (The income
(dividends, capital gains, or interest payments) from an
investment, as a percentage of the current price of the
investment.)
yield curve
(A
graph of available bond yields that shows the dividend yield on the
vertical line and bond durations on the horizontal line. A typical
yield curve is rising, or positive, because long-term bonds pay
more interest. The sharper the curve slope, the less additional
duration you need for a higher yield. Treasury securities are
typically plotted on a yield curve. )
yield to maturity
(
The total return of a bond (or other debt security) that is held to
maturity, including interest payments and any difference between
how much the investor paid for the bond and its face value.
)
YTD (Year to
date.)
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Z
Zacks average brokerage
recommendation (ABR) (The ABR is the calculated average of
the actual recommendations (strong buy, hold, sell, etc.) made by
brokerage firms for a given stock as reported by Zacks Investment
Research. )
Zacks consensus
(
Average recommendation values expressed as standardized ratings
equivalents on a scale of 1.0 to 5.0, where 1.0 = strong buy, 1.1
through 2.0 = moderate buy, 2.1 through 3.0 = hold, 3.1 through 4.0
= moderate sell, 4.1 through 5.0 = strong sell. )
Zacks industry
(
The industry category to which a company belongs, according to
Zacks Investment Research. )
zero-coupon bond
( A
bond that, instead of paying interest, is sold at a deep discount.
The purchaser receives the face value at maturity, and the
difference between purchase price and face value is the yield. Most
zero-coupon bonds are Treasury securities. )
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