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glossary of  terms


: anything of value (e.g., securities, property) that you own that increases your net worth.

bear market

: the term used to describe a prolonged period of declining stock prices.


: a bank or financial institution that holds onto a client's investment assets. 


: a distribution of income from investments to shareholders.


: a person/company legally appointed and authorized to act in the best interest of their clients in all aspects of conduct,  investing, and safeguarding private information. 

growth fund

: a mutual fund that invests in stock with an objective of capital appreciation.


: an acronym for Individual Retirement Account, IRAs are tax-deferred accounts established by workers with earned income to save for retirement. There are two types of IRAs: Traditional IRAs and Roth IRAs.

mutual fund

: an investment company that pools deposits from many shareholders and invests in the stock, bonds, or cash assets of many companies in order to achieve the specific objectives of the fund.

retirement planning

: the process of planning one's finances and making lifestyle decisions for later life, typically for the period of time after paid employment ceases.


: a term used to refer to stocks and bonds (e.g., tax-exempt securities) in general.

social security

: federal government program that provides retirement/disability benefits to employees and dependents. Employees pay for Social Security through payroll taxes. More information can be found at


: a person or financial institution that manages the property of others.


: the degree of price fluctuation associated with a specific investment or market index. The more price fluctuation that is experienced, the greater the volatility.

asset allocation fund

: an "all-in-one" mutual fund that includes stocks, bonds, and cash equivalent assets in its portfolio.


: a debt certificate or IOU issued by a corporation or unit of government. Borrowers are promised interest for loaning their money to the bond issuer and the return of their investment at a specified future date.


: a type of authority that allows us to buy and sell securities without client consent but in line with client risk tolerance, objectives, and needs.

emergency fund

: a sum of money set aside in a readily accessible savings for unanticipated events such as unemployment, car repairs, etc.. A sum to cover basic living costs for three months

financial planning

: the process of establishing financial goals and developing an action plan to achieve them. Includes all aspects of personal finance, managing cash flow, insurance, investing, taxes, and retirement/estate planning.

income fund

: a mutual fund that invests in stocks or bonds with a high potential for current income, either dividends (e.g., utility stocks) or interest (e.g., bonds).

index fund

: a type of mutual fund that aims to match a particular stock or bond index by investing in the securities found in the index.

net income

: the amount of money that an employee receives in a paycheck after items such as income taxes, Social Security (FICA) tax, retirement plan savings, and other items have been deducted.


: transfer of funds from a retirement savings plan, such as a 401(k) or 403(b), to a traditional IRA. The term is also used for changes from one type of IRA investment to another.


: unit of ownership in a company (common stock) or mutual fund. The value of a share will vary according to market conditions and other factors.


: a type of investment that represents a unit of ownership of a corporation. This ownership is represented by shares of stock, which are a claim on the corporation's assets and earnings.

u.s. savings bond

: Series EE and inflation-adjusted Series I, are two low-cost federal debt securities. Interest on both types of savings bonds

is adjusted semi-annually on May 1 and November 1 according to market conditions.

401k plan

: a tax-deferred retirement savings plan available to employees of for-profit corporations.

basis/cost basis

: the value assigned to an asset, generally it's purchase price plus the amount of subsequent deposits, that is used to determine a capital gain or capital loss for tax purposes.

bull market

: the term used to describe a prolonged period of rising stock prices.


: the process of selecting different investments to reduce investment risk.


: an acronym for Electronic Transfer Accounts, are used for direct deposit by people who receive regular checks from the federal government, such as Social Security benefit payments.

gross income

: the amount of earnings before deductions calculated by prorating a worker's annual salary according to the number of pay periods or by multiplying an hourly wage rate by the number of hours worked.


: an unmanaged collection of securities whose overall performance is used as an indication of stock/bond market trends. An example is the widely quoted Dow Jones Industrial Average. Another is the Standard & Poor's 500 (S&P 500).

junk bond

: also called high-yield bonds, they are high-risk bonds (rated less than BBB) that are offered by issuers with low bond ratings and, therefore, have a greater chance of default.

portfolio rebalancing

: periodically adjusting the holdings in an investment portfolio to maintain a certain asset allocation.

roth ira

: a type of IRA where contributions are not tax-deductible but earnings on savings are tax-exempt if made more than five years after a Roth IRA is established and after age 59 ½.

spending plan

: a written plan for spending and saving money.


: investments where earnings that are not taxed in the current year but will be later, usually at the time of withdrawal. Examples are Individual Retirement Accounts (IRAs), 401(k) and 403(b) plans, etc.


: beliefs about what is important in a person's life that influence financial goals and spending decisions.

403b plan

: similar to a 401(k), a tax-deferred retirement savings plan for employees of tax-exempt educational, medical, or research organizations, colleges, and public schools.



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