Annual Report The formal financial statement showing assets, liabilities and
earnings issued yearly by a corporation to its shareowners.
Arbitrage
The process of buying and simultaneously selling the same or equivalent securities in different markets.
Asset Allocation
The distribution of your funds among various investment alternatives or asset classes. Typically, asset allocation is expressed in percentages – for example, 40% stock, 40% bond, and 20% money market.
Asset Classes
Different types of investments. Equities (stocks), fixed income (bonds) and money market investments are examples of asset classes.
Assets
Everything that a corporation owns or that is due to it; cash, investments, inventory, materials, building, machinery, patents or goodwill.
At the Close Order
A market order that is to be executed at or as near to the close as possible.
At the Opening Order
A market order that is to be executed at or about the opening of the market.
BearA person who believes the market will decline.
Bear Market
A declining market.
Bid and Ask
The bid is the highest price anyone has declared that he wants to pay for a security at a given time; and ask is the lowest price anyone will take at the same time.
Big Board
The popular name for the New York Stock Exchange.
Block
A large holding of stock, usually considered to be 10,000 shares or more.
Blue Chip
Common Stock in a company known nationally, has wide acceptance of its products and services and for its ability to make money and pay dividends.
Bonds
See fixed income.
Book Value
Value of individual assets, calculated as actual cost less allowances for any depreciation. Book value may be much more or less than current market value.
Bull
One who believes the market will rise.
Bull Market
A rising market.
Cash Surrender
Value
The current contract value less any applicable
surrender charges.
Commercial Paper
Short-term promissory notes of a major corporation.
Common Stock
Securities that represent ownership interest in a corporation. If the company issued preferred stock, both the common and preferred stockholders have ownership rights, but preferred normally has prior claim on dividends, and in case of liquidation, assets.
Confirmation
Trade invoices issued to customers of the brokerage firms. A written notice of trade, giving price, securities description, settlement money, trade and settlement date, plus other pertinent information.
Current Ratio
Current assets divided by current liabilities. The ratio shows a company’s ability to pay its current obligations from current assets.
Current Yield
Annual interest in an investment divided by the market price.
DividendThe payment designated by a company’s board of directors to be distributed to the company’s shareholders. Preferred shares generally pay a fixed dividend while common shares pay a dividend that varies with the company’s earnings and the amount of cash on hand. Dividends may be omitted, for instance, if business is poor or the directors withhold earnings to reinvest in the company.
Dollar-Cost Averaging
A system of buying securities at regular intervals with a fixed dollar amount. If each investment is the same number of dollars, payments buy more shares when the price is low and fewer shares when it is high. That reduces the average price you pay per share.
Dow Jones
A highly reputable financial information services company; issuer of the Wall Street Journal, Barron’s National Business and Financial Weekly, and other influential publications as well as computer databases and additional financial information. The Dow Jones Industrial Average is a closely watched indicator of stock-market performance.
Down Tick
A listed equity trade below the last different sale.
Portion of a company’s profit allocated to each outstanding share of common stock. For instance, a corporation that earned $10 million last year and has 10 million shares outstanding would report earnings of $1 per share. Current and future earnings per share are key statistics in evaluation a stock’s outlook.
Equity
The ownership interest of common and preferred stockholders in a company. Equities are common and preferred stocks.
Ex-Date
If you own the stock before this date you are entitled to be paid the dividend.
Family MemberFor "529" plans such as CollegeBoundfund, a family member of a designated beneficiary is defined as any of the following:
A son, daughter, grandson or granddaughter of the beneficiary, or
A stepson or stepdaughter of the beneficiary; or
A brother, sister, stepbrother or stepsister of the beneficiary; or
The father or mother of the beneficiary or an ancestor of either; or
a son or daughter of a brother or sister of the beneficiary; or
A brother or sister of the father or mother of the beneficiary, or
A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law of the beneficiary;
Or
The spouse of the beneficiary or the spouse of any of the other foregoing individuals.
A first cousin of the beneficiary.
For this purpose, a child includes a legally adopted child, and a brother or sister includes a brother or sister by half blood.
Fixed Income Investments
Also called "bonds". Essentially, these are loans that you make to a government or corporation (called the "issuer") when it needs to raise cash. They have a "maturity date", which is the date the issuer is obligated to repay you the "principal", or face amount, of the bond. Bonds also pay you interest until their maturity date. Investments that pay a fixed rate of interest over a specified time period. These investments include fixed rate bonds, treasury notes (similar to bonds, but issued by the United States with maturities of more than one but less than five years).
