Interest that has accumulated between the most recent payment of a bond or other fixed-income security and its sale.

An investment that guarantees a fixed or variable payment, usually at retirement.

Anything owned by a business, organization, or individual with commercial or exchange value.

A fund with a mix of stocks and bonds.

Used to calculate interest rates and the yield of bonds. Each percentage point of yield in a bond equals 100 basis points. Basis points are also used in interest rate calculations.

A prolonged period of declining securities prices.

Debt securities issued by the federal government, state governments, or corporations with maturities of 10 years or more from the date of issuance. Bonds pay interest every six months, and the principal is returned to the holder at maturity.

A period of at least a few months where stock or bond prices are on the rise and overall volumes are higher than usual.

Certificate of deposit. CDs have a specified interest rate but can be issued in any amount.

The difference between the purchase price of a security and the higher price at which it was sold.

Bank or other financial institution that retains custody of a client’s CDs, mutual funds, and other assets.

Investments, such as options or futures, with a value that is based on or "derived" from another underlying security (usually a stock or bond).

The predetermined distribution of earnings to shareholders, as determined by security class (common, preferred). Dividends are usually paid in the form of cash or stock and are typically paid quarterly.

The automatic reinvestment of shareholder dividends in more shares of the company's stock, often without commission. Dividend Reinvestment Plans (DRPS) allow shareholders to accumulate stock over the long term using dollar cost averaging. Each time a dividend is paid, the dividend amount is used to purchase more shares, usually at the market price, but sometimes at a discounted price.

A company's profit divided by the number of shares outstanding. 

Ownership interest in a company or property. Stock is an equity.

An investment contract that guarantees regular fixed payment, usually at retirement. Capital grows tax-deferred.

A security that pays a fixed rate of return. This term usually refers to government, corporate, and municipal bonds, which pay a fixed interest rate until maturity. Preferred stock is also considered a fixed income investment because it generally pays a fixed dividend.

A bond issued by a government. Examples include Treasury bonds, T-bills, and T-notes.

Individual retirement account. Contributions may be tax-deductible.

Learn more

Indexes like the Dow Jones Industrial, the Standard and Poor's 500, and Nasdaq are often used as benchmarks to measure performance of a particular asset class, investment vehicle, or financial sector.

The cost of using money, typically expressed as a rate per period of time or as income paid on an investment.

The profit or gain realized on the sale of a security that has been held for more than one year.

The current market price of a security or account, based on the last recorded trade for all underlying securities.

While typically not federally insured, money market funds are considered low risk. They hold highly liquid, short-term investments.

State or local governments typically issue “munis” to fund special projects or general governmental needs. The interest earned is often exempt from federal, state, and local taxes.

A fund invested in a variety of securities, such as stocks, bonds, and money market instruments, and managed for a fee.

The array of funds, usually representing a range of objectives and risk, offered by a particular mutual fund company.

A mutual fund which charges no fees for the purchase or sale of securities. (Transaction fees may apply, however.)

Learn more

Also known as the ask price, the price at which a security is offered for sale.

A security’s price at the beginning of the trading day.

An investment contract that enables the owner to buy or sell securities at a specific price until a specified date.

The price of a stock divided by its earnings per share. This ratio, also known as the multiple, shows investors how much they are paying for a company's earning power. The higher the P/E, the higher the expectation for earnings growth.

All holdings (stocks, bonds, funds, etc.) in an account.

When an investment includes preferred stock and common stock, the owners of preferred stock receive dividends or liquidated assets first.

How much a bond is selling above its face (or par) value.

The base lending rate, set by the Federal Reserve, which banks use to price commercial loans to creditworthy customers. Loan rates are often tied to the prime rate.

The amount of an investment minus earnings, fees, or commissions. It’s the total face amount of a bond.

A tax-deferred investment plan set up by employers for their employees.

The profit or loss when a security is sold.

The nontaxable transfer of assets from one qualified retirement plan to another.

Learn more

The Securities and Exchange Commission regulates U.S. financial markets and administers statutes designed to promote full public disclosure and protect the investing public against malpractice in the securities markets. All issues offered in interstate commerce must be registered with the SEC.

An investment instrument that signifies ownership in a corporation (stock), a creditor relationship with a corporation or governmental entity (bond), or the right to ownership (option, right, or warrant).

The difference between the bid and ask prices for a stock or bond. The spread may narrow or widen depending on supply and demand.

Proportionate ownership of a company represented as shares. Different types of stock (common or preferred) have different entitlements.

The completed purchase or sale of a security.

The written or electronic document that brokerage firms are required to send customers at the completion of a securities transaction.

The date when a securities transaction actually takes place. The settlement date typically follows one or two days later.

The cost, similar to a commission, associated with the purchase or redemption of a security.

The charge levied upon the execution of a trade (previously referred to as the SEC fee or regulatory transaction fee).

A debt obligation (like a Treasury bond, Treasury note, or T-bill) that the U.S. Department of the Treasury issues that is backed by the full faith and credit of the government and exempt from state and local taxes.

An account type whereby a trustee holds title to property or assets for the benefit of others, called beneficiaries. A trust agreement is required to establish a trust, which contains all provisions, and sets forth the powers of the trustee.

With a Uniform Gifts to Minors Act account, an individual can transfer cash and securities to minors without the complications of a formal trust.

A Uniform Transfers to Minors Act account enables an individual to transfer cash, securities, and real estate to a minor without the complications of a formal trust.

An investment that guarantees a payment, usually at retirement, that varies either based on the market value of the portfolio or rate of appreciation. All capital in a variable annuity grows tax-deferred.

The magnitude and frequency of changes in a security's value within a short period of time.

The return on an investor's capital investment. Yield may be the percentage rate of return paid on a common or preferred individual stock or mutual fund in dividends or the amount of interest paid (the rate of return), on a bond.