G
General Obligation Bond
A municipal bond which is backed by the full faith and credit of a municipality. It includes the authority to raise taxes and/or borrow to pay back interest and principal. See Bond.

Ginnie Mae
Nickname for Government National Mortgage Association (GNMA), a wholly-owned corporation of the U.S. Government that functions as part of the Department of Housing and Urban Development (HUD). Also means a security that represents a pool of mortgages exceeding $1 million that is packaged from individual home mortgages and resold to investors who receive both principal and interest, just like a bank that holds a home mortgage. These securities are liquid and U.S. Government insured.

Glamour Stock
A stock with a wide public and institutional following. You may want to avoid investing in these stocks because they are over-hyped and extremely vulnerable to a downward slide.

Global Bonds
Mutual fund investing primarily in debt obligations (i.e. bonds) of foreign governments and/or corporations. Global bond funds can also be subject to foreign currency exchange risks.

Global Equities
Stocks purchased from companies all over the world, including the Unites States. Global equities can also expose you to foreign currency risk.

Gold
A precious metal usually sought after during times of rapidly rising inflation. For mutual fund investors, gold can also refer to the stock of gold mining companies, as well as bullion.

Government Bonds
Mutual fund investing primarily in debt obligations (i.e. bonds) of the U.S. government. Government bond funds can be short-term, intermediate-term or long-term, reflecting the average maturity of the bonds held in the portfolio.

Gross Domestic Product (GDP)
A measure of the economy which includes the value of all products and services produced by a nation in a given year. The growth rate of GDP is used to compare the economic progress of various nations.

Growth & Income
A security purchased for long-term price appreciation (similar to long-term growth) and also for potential dividend (or interest) income.

Growth Rate
The percentage rate of change in some financial characteristic of a company. See Historical 5-year Growth Rate, Projected 5-year Growth Rate, Dividend Growth Rate, Sales 3-year Growth Rate, and Net Income 3-year Growth Rate.

H
Hedging
An investment strategy of lowering risk by buying securities that have offsetting risk characteristics. A perfect hedge eliminates risk entirely. Hedging strategies lower return since there is a cost involved in hedging. For example, a portfolio manager could short a futures contract which will perfectly offset any decrease in the value of the portfolio. Options and short selling stock can also be used for hedging. Hedge funds are investment pools that are free to use any hedging techniques they desire and they often make large bets in a relatively small number of different holdings.

Hidden Asset
An asset that is omitted or understated in the balance sheet of a company. Discovering hidden assets before the market does can lead to appreciable price gains for savvy investors.

High Flyer
A highly speculative stock with a rising price and high volatility which makes it vulnerable to dramatic crashes.

Holding
All the shares (mutual funds & stocks), contracts (options), or face amount (bonds) you own of an investment.

House Call
A brokerage firm's notice to the client that the equity in a margin account is below the firm's maintenance level and needs additional funds immediately.

Hybrid Investment
An investment which has the major characteristics of two or more other investments. For example, a convertible preferred stock generally pays a steady dividend and has steady principal like a high quality corporate bond, but it can be converted into common stock. Hybrids can be complicated to understand and are best left to sophisticated investors.

I
Imputed Interest
Interest which is not actually paid to bond holders but which the IRS may tax anyway. Common with zero coupon bond interest. See Interest and Bond.

Income
Dividends or interest received by owners of equity or bonds respectively. Dividends represent a portion of earnings paid to shareholders while interest is compensation to bondholders in the form of cash or more bonds for the lending of capital. Reinvested income can significantly add to returns. See Projected Income.

In-The-Money Option
A call option is in-the-money if the strike price is less than the market price of the underlying security. A put option is in-the-money if the strike price is greater than the market price of the underlying security.

Income Account
An account that receives interest from bonds and credit balances, or dividends from stock positions.

Indexing
Constructing a portfolio to match the performance of a specific index, such as the S&P 500. Individuals can do this by purchasing shares in an index mutual fund.

Indices
Click Dow Jones Indices and S&P Indices in the Glossary list for these definitions.

Information
See Stock Information for these definitions.

Institution
The name of the institution issuing a CD or money market.

Institutions Holding
The percentage of outstanding shares held by institutions for investment purposes. Includes charitable trusts, pension funds, mutual funds, brokerage firms, and banks.

Interest
Compensation to bondholders in the form of cash or more bonds for the lending of capital. Accumulated or accrued interest is the interest due to the seller of a bond from the day after the last interest payment to the day before the settlement date. It is paid by the buyer of the bond. Imputed interest is not paid to the bondholder but it is calculated as if it was so that taxes can be paid on it anyway. Reinvested interest can significantly add to returns.

Interest Dates
Displays the frequency and dates that interest on a given bond is paid. By carefully selecting interest dates, you can receive income monthly from a group of bonds, with staggered interest dates.

Investment
An appreciating or income producing asset. An open investment is one you currently own. A closed investment is one you once owned. A long investment is an open investment that you bought. A short investment is an open investment that you sold short - i.e., you borrowed the investment from someone else, sold it, pocketed the proceeds, you hope it decreases in value, and you are obliged to buy it back in the future and return it to the original owner. An investment can be short and long at the same time if it contains both long and short lots. All investments are classified by type as a way of organizing your investments. See Holding.

Individual Retirement Account (IRA)
An Individual Retirement Account is a personal, tax-deferred, retirement account in which an employed person can contribute a maximum amount per year. There are specific rules concerning level of participation and eligibility for an a IRA and whether an employee's contributions are tax-deductible. Consult a financial consultant or tax advisor.

Inflation - CPI
The rise in price of goods and services, or Consumer Price Index (CPI), when too much money chases too few goods on the market. Moderate inflation is a result of economic growth. Hyperinflation (CPI rising at rates of 100% or more annually) causes people to lose confidence in their economy and put their money in hard assets such as gold and real estate.

Inflation Rate
The annual percentage change in the price of goods and services. At the consumer level, it is the Consumer Price Index (CPI) and at the wholesale level it is the Producer Price Index (PPI).

Intermediate Government Bonds
A U.S. government debt instrument having a maturity of between 3 to 10 years.

International Equities
Stocks purchased from companies based in countries other than the Unites States. International equities can also expose you to foreign currency risk.

Issuer
The official name of the company issuing a given bond.

J
Joint Account
A bank or brokerage account that two or more people own jointly. Some joint accounts are set up so that all owners of the account must sign checks and approve all withdrawals or brokerage transactions. In others, any one party can take these actions on his or her own. Joint accounts usually include rights of survivorship (upon the death of one party , the other gets complete ownership) or with tenants in common (the ownership of the deceased party's half goes to his estate, not the other party).

Joint and Survivor Annuity
An annuity that pays two or more beneficiaries. When one of them dies, the payments continue to the survivors but the deceased's share is no longer paid.

Jumbo CD
A certificate of deposit with a high minimum deposit required, often $90,000 or more. They carry a slightly higher interest rate; however, if the value of the CD plus interest held in the account exceeds $100,000, this excess is not insured by the FDIC. To be safe, you can hold several jumbo CDs at different banks.

Junior Security
A security with a lower claim on assets in the event of a company's liquidation. Normally, common stock is most junior to all other corporate issues. Then, from junior to senior, the order is preferred stock, debentures, and mortgage bonds. This last item is a direct claim on real property and is the most senior.

Junk Bond
A junk bond (or high-yield bond) is one with a S&P credit rating of BB or lower and that carries higher risk of interest or principal default than better rated investment grade bonds. Junk bonds are issued in leveraged buyouts and other takeovers by companies without long track records of sales and earnings, or by those with questionable credit strength.

K
Keogh Plan
Tax-deferred pension account designated for employees of unincorporated businesses or for persons who are self-employed, either full -time or part-time.

Kicker
A provision for equity participation which is often added to a new debt issue to make it more attractive in the market. Rights, warrants, and convertibility are common examples. Also called sweeteners.

L
Leverage
A company is leveraged when it has a high ratio of debt to equity. If the company can use the extra debt to expand and generate more than enough additional revenue to cover the higher interest costs, then the leverage is beneficial to the current shareholders, that is, each share has been leveraged.

Liabilities
Total liabilities is the sum of your Short Market Value plus your Debit Balances from the prior trading day. Short Market Value is the market value of short positions held in your short account as of the prior day's market close. Increases in this figure mean that positions you have sold short are moving against you, or up. Each Monday, your short account will be marked to the market. The Short Market Value of the account is used to recalculate the proper level of collateralization to secure the short positions in the account. The Debit Balance reflects the closing debit balance as of the close on the prior trading day.

Limit Order
Order that sets a specific price (Limit Price) that is the highest a buyer will pay or the lowest a seller wants to receive. Buyer will accept price lower than limit and seller higher than limit. It may be a Day or GTC (Good Until Canceled) order. If no price is indicated, the order is a market order by default.

Limited Partnership
A business or investment where limited partners provide capital, share in profits, have limited legal liability, and leave the management of the business to general partners. Can be tradable and listed on an exchange, packaged and sold by brokers and not exchange tradable, or tradable to other partners only. REITS (real estate investment trusts) are popular LPs. Most LPs provide both income and appreciation. Some are highly liquid and others not.

Liquidity
The ability to turn an asset into cash. A highly liquid asset is easy to sell because an active market exists that sets prices which are continuously adjusted for supply and demand. An example is a listed stock or mutual fund. A less liquid asset is real estate or a collectible.

Loan Value
Maximum percentage of current market value of margin eligible securities that a brokerage firm can lend a margin account client.

Long Investments
Includes: Cash Balance, Current Value, Total Cost, and Unrealized Gain/Loss. Long investments are investments that you have bought with the goal of price appreciation and/or income generation. Short investments, on the other hand, are first sold and then bought back.

Long Position
Securities owned by the client and held in the client's account at the brokerage firm.

Long-Term Growth
Securities whose price appreciation is anticipated over the long term; i.e., a year or more. Long-term growth securities tend to be more stable and appreciate at a slower, albeit steadier rate than do maximum capital gains securities.

Lot
A group of identical UNITS (for securities) or nearly identical units (for collectibles) of an investment that are traded at the same time and price. Open lots are the contents of open investments and can be long (buys) or short (short sell). Closed lots are the contents of closed investments and can be long (sell) or short (buy to cover).