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Qualified Distribution
A qualified distribution is made to a taxpayer over age 59½ from a Roth IRA and meets the 5-year holding period.
Qualified Retirement Plan
Qualified retirement plans are those approved by the IRS and typically receive preferential tax treatment. These include 401(k) plans available from many employers allowing pretax dollar contributions to be contributed to tax-deferred retirement plans, 403(b) plans similar to 401(k) but for educational and not-for-profit organizations and 457(b) plans which allow government employees to contribute pretax dollars to tax-advantaged deferred compensation plans.
Real Rate of Return
The return on an investment after it has been adjusted for inflation.
Record Date
The date which determines the shareholders who are eligible to
participate in a corporate income distribution.
Redemption Price
Also known as "bid price," this is the price at which
mutual funds buy back their shares. It is usually the net asset
value of the fund less any back-end sales charges.
Registered Representative
An employee of a brokerage house that has been licensed by the
Securities and Exchange Commission. This requires passing a series
of tests.
Required Minimum Distribution (RMD)
When the owner of a traditional IRA reaches 70½, or a participant in a 401(k), 403(b) or 457 plan reaches 70½ and terminates employment, a minimum amount is required to be withdrawn each year.
Risk
The potential to lose money, including principal, or not to make
money on an investment.
Risk Tolerance
An investor's personal ability or willingness to endure declines
in the prices of investments.
Rollover
When you leave an employer, you may be eligible for a “lump sum distribution” from their retirement plan. This distribution can be “rolled over” into a new IRA, allowing the money to keep its tax-advantaged status. An “indirect rollover” occurs when the money is sent to the participant. A “direct rollover” occurs when the money is sent directly to the new plan.
Roth IRA
When you leave an employer, you may be eligible for a “lump sum distribution” from their retirement plan. This distribution can be “rolled over” You may make annual non-deductible contributions to this tax-deferred retirement account. Qualified distributions may be tax-free.
Russell 3000 Equally Weighted Index
This index consists of 3,000 large U.S. companies representing
about 98% of the equity markets. The smallest company in the index
has a market value of roughly $25 million.
S&P 500 Index
The Standard & Poor’s Composite 500 Index (S&P 500)
is an index of 500 broadly diversified major corporations’
stock. It is the measure of stock market performance most commonly
used by professional investors.
Salomon Broad Bond
This index is a market-cap weighted bond index that includes
Treasury and government-sponsored bonds, mortgage-backed securities,
and investment grade fixed-rate corporate bonds with maturities
of one year or longer.
Securities
Investments, including stocks, bonds, and money market instruments.
Share
A unit of equity ownership in a corporation, represented by a
stock certificate, which names the company and the shareowner.
Also a unit of ownership in a mutual fund.
Shareholder
Someone who owns shares in a mutual fund.
Short-term Capital Gain
A profit on the sale of a security or mutual fund share held
for one year or less.
Small Capitalization (Cap) Stocks
The stock of companies whose market value is usually less than
$650 million. Small cap companies grow faster than large cap companies
and typically use any profits for expansion rather than for paying
dividends. They often have higher risk but also greater potential
for capital gains.
Standard Deviation
The degree to which a fund's return varies from the average of
all similar funds.
Statement of Additional Information
A supplement to a mutual fund's prospectus, provided under separate
cover. It contains more detailed information about fund policies,
operations, and investment risks and lists all officers and directors
of the fund and their compensation.
Stock
Also known as equity, stock represents ownership position in
a business entity, such as a company or corporation. Each share
of stock represents a proportionate share of ownership.
Stock Fund
A mutual fund that invests mainly in stocks.
Stock Fund - Common Stock
Description to come.
Stock Fung - Preferred Stock
Description to come.
Stock Split
Distribution of new shares to each stock shareholder on a proportional
basis to the number of shares already held by that individual.
Tax-free Funds
A fixed-income or money market mutual fund that invests in securities
which are issued by state, county, and local governments and their
agencies. The proceeds from these securities are used to finance
a variety of public-works projects, such as the building of roads,
schools, and sewers. Under current tax laws, the interest paid
to investors in these securities is generally exempt from federal
income taxes. These funds are frequently purchased by investors
who wish to shelter their investment income from taxes.
Time Horizon
Description to come.
Ticker Symbol
Letters that identify a security for trading purposes. Also known
as the stock symbol.
Total Return
The combined return of capital appreciation and income (interest
and dividends) that an investment earns. Total return shows the
value of an investment over a period of time. It is calculated
by adding appreciation to reinvested dividends and capital gains.
Realistic time periods by which to gauge total return performance
are 1-, 5-, and 10-year periods.
Trade Date
The actual date on which your shares are purchased or sold.
Traditional IRA
You may make annual deductible contributions to this taxdeferred retirement account. Withdrawals are subject to be taxed at the time of withdrawal.
Transfer Agent
An organization employed by a mutual fund to handle the transfer,
issue, purchase, sales, or conversion of securities, mailing notices
and reports to stockholders, paying all dividends, affecting stock
subscriptions, and maintaining the records relating to the accounts
of the mutual fund’s shareholders.
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