Finance

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Back-End Load

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A sales charge or commission paid when an individual sells an investment, such as a mutual fund or an annuity. Intended to discourage withdrawals. also called redemption fee or deferred sales charge.

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Front-End Load

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A sales charge paid when an individual buys an investment, such as a mutual fund, limited partnership, annuity, or insurance policy. The load is clubbed with the first payment made by an investor, so the total initial payment is higher than the later payments. The purpose of a load is to cover administrative expenses and transaction costs and sometimes to discourage asset turnover. opposite of back-end load.

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Municipal Bonds

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Bond issued by a state, city, or local government.

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Mutual Funds

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An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives.

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Annuity

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a series of payments of set size and frequency, often to a retired person.

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Rate of Return

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The rate of return on an investment, expressed as a percentage of the total amount invested. Rate of return is usually, but not always, calculated annually. also called return.

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Liquidity

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The ability of an asset to be converted into cash quickly and without any price discount.

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Treasury Notes

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A negotiable debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of between 1 and 7 years. also called U.S. Treasury Note.

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Corporate Bonds

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A type of bond issued by a corporation. Corporate bonds often pay higher rates than government or municipal bonds, because they tend to be riskier.

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Bonds

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A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing.

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Inflation

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The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index.

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Treasury Bonds

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A negotiable, coupon-bearing debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of more than 7 years.

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Stocks

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An instrument that signifies an ownership position (called equity) in a corporation, and represents a claim on its proportional share in the corporation's assets and profits.

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Stocks Certificate

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A document reflecting legal ownership of a specific number of stock shares in a corporation. also called certificate of stock.

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Treasury Bills

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A negotiable debt obligation issued by the U.S. government and backed by its full faith and credit, having a maturity of one year or less.

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US savings Bond

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A registered, non-callable, non-transferable bond issued by the U.S. Government, and backed by its full faith and credit.

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Specialist

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A stock exchange member who makes a market for certain exchange-traded securities, maintaining an inventory of those securities and standing ready to buy and sell shares as necessary to maintain an orderly market for those shares.

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CD

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Certificate of Deposit. Short- or medium-term, interest-bearing, FDIC-insured debt instrument offered by banks and savings and loans.

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Real Estate

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A piece of land, including the air above it and the ground below it, and any buildings or structures on it. also called realty.

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Dollar Cost Averaging

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An investment strategy designed to reduce volatility in which securities, typically mutual funds, are purchased in fixed dollar amounts at regular intervals, regardless of what direction the market is moving.