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Annuity
- A contract that provides for periodic payments for a lifetime, or for a defined period of time, or both.
- Alpha
- A measure of risk-adjusted performance. It represents the difference between a fund's actual performance and its expected performance given its level of risk as measured by beta.
- Appreciation
- The increase in value of an asset.
- Balanced Fund
- A type of fund which creates a balance among its assets by including stocks, bonds and money market instruments.
- Beta
- This means market risk of the securities in a portfolio. This measure reflects the responsiveness of the portfolio to the S&P 500. By definition the market beta of the S&P 500 index is 1.0. If the beta of a fund is 1.05, it is expected to perform 5% better than the S&P 500 in an up market, and 5% worse in a down market.
- Bonds
- A class of assets representing a loan to the government or a corporation. These securities pay a specific interest rate over a given period of time after which the owner receives back his or her initial investment.
- Capital Appreciation
- An increase in an investment's value.
- Compounding
- The periodic process by which interest or return is applied not only to one's savings or investment, but also to previous interest or return amounts.
- Direct Rollover
- A distribution from a qualified plan or a 403(b) plan that is sent directly to the trustee, custodian, or issuer of the receiving IRA or other qualified plan.
- Direct Transfer
- The movement of money from one tax-deferred retirement savings plan to another plan or custodian. A transfer does not constitute a withdrawal and does not incur any taxes.
- Diversification
- Investing in a variety of asset classes (for example, stocks, bonds and money markets) in order to reduce risk and increase return.
- Dividend
- A portion of net profits declared by a company's board of directors for distribution to stockholders.
- Dividend Yield
- The average of all stocks in a portfolio's trailing 12-month dividend income (cash distribution of earnings to shareholders) dividend by its market price on the valuation date.
- Dollar-Cost Averaging
- The practice of investing equal amounts, commonly in stocks, at regular intervals regardless of price, usually resulting in a lower share/unit cost over time.
- Early Withdrawal Penalty
- A 10% penalty, in addition to ordinary income taxes, on money that is withdrawn from a tax-deferred retirement savings plan prior to age 59 1/2. The penalty does not apply in certain circumstances
- Employer Matching Contribution
- The amount, if any, that your employer contributes on your behalf (usually expressed as a formula based on your contributions) to your retirement plan.
- Fixed-Income Account
- A security which pays a fixed rate of return, often for a fixed period of time.
- Individual Retirement Account (IRA)
- An account that allows you to invest on a tax-deferred basis. Depending on the level and nature of your income, you may be able to make regular contributions to an IRA.
- Inflation
- An economic condition causing consumers to pay more in the future for goods or services than they would today for an equal amount of the same goods or services.
- In-Service Withdrawal
- A withdrawal from a retirement savings plan by a participant who remains employed.
- Joint and Survivor Annuity
- An annuity that covers two people and pays benefits until the last survivor dies.
- Liquidity
- The ease with which an investment may be converted to cash.
- Lump Sum Distributions
- A single payment representing an employee's interest in a retirement savings plan. The payment must be the result of termination of service, death, disability, or the attainment of age 59 1/2, and must be made in a single tax year, and may be eligible for forward tax averaging or rollover.
- Market Value
- The sum of the market price of the securities in a portfolio as of the valuation date, rounded to millions of dollars. The fund's total net assets.
- Market Risk
- Risk of day-to-day changes in prices at which a security can be bought or sold.
- Market Price
- The price of a bond or share of common stock at any given time.
- Maturity
- Date on which the principal amount of a note, draft, acceptance, bond or other debt instrument becomes due and payable. Also, termination or due date on which an installment loan must be paid in full.
- Mutual Fund
- A fund which pools the investments of individual investors in other companies, providing the benefits of economics of scales as well as access to investments which may otherwise be available.
- Portfolio
- A varied group of securities owned by an individual or institution.
- Pre-Tax Contributions
- A portion of an employee's salary contributed to a retirement saving plan that would not be included in the employee's gross income for tax purposes.
- Prospectus
- A formal document describing an investment opportunity and offering it for sale.
- Price/Earning Ratio
- The mean ratio of the price of each stock divided by its earnings per share in a portfolio. It reflects the amount an investor is willing to pay per dollar of a company's earnings.
- Reinvestment
- Using dividends and gains to purchase additional shares in an investment rather than taking a distribution in cash.
- Return
- The amount earned, or lost, on the original worth of the investment.
- Risk
- A measure of the chance of loss or not gaining value. Each investment has individual risk characteristics.
- Rollover IRA
- An Individual Retirement Account that is established for the purpose of receiving a distribution from a qualified plan.
- Small Capitalization Company Stocks
- Stocks of smaller companies, which are generally more volatile than larger capitalization stocks. These often offer higher potential returns than stocks of large companies over the long run.
- Standard Deviation
- A measure of dispersion around the mean or average return. The higher the standard deviation, the greater the dispersion of returns and the higher the risk (volatility) associated with investment.
- Standard & Poor's 500
- A composite stock index based on stock prices comprising of 425 industrial, 50 utility, and 25 railroad companies.
- Stock
- A share of ownership in a corporation.
- Tax-Deferred
- An IRS-approved delay in the payment of taxes on income. For example, taxes on annual contributions to a retirement program may be deferred until the money is withdrawn.
- Treasury Bills (T-Bills)
- A U.S. Government short-term security sold to the public. T-Bills mature in periods of 30 days, or 13, 26, or 52 weeks. Because T-Bills are sold at a discount, the interest earned is the difference between the discounted purchase price and the amount the government pays at maturity.
- Unit (or Share) Value
- The price of an interest in any investment option. The value of a unit typically varies on a daily basis.
- Variable Annuity
- The establishment of fixed-dollar annuity guarantees whose underlying reserves are invested in one or more of the insurer's market valued separate accounts.
- Vesting
- Represents the percent of ownership of employer contributions to a participant's account in a retirement savings plan. This is based on various eligibility factors.
- Volatility
- Used interchangeable with "risk." Gauge of an investment's tendency to move up and down in price.
- Yield
- Percentage of return on an investment.
- Yield to Maturity
- The single discount rate that sets the present value of all cash flows from a fixed interest security equal to the current prices.
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Individual Investors 
Glossary 
