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Have An Emergency Fund - In life, things happen that we don't expect, car breaks down or an appliance dies, and unless you have an emergency fund tucked away you...

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Investing Glossary - A

    Abnormal Return

    Abnormal Return - An abnormal return, when it is more, yields an excellent return on a stock or your entire portfolio, as you are making more on your return than the stock market you have invested in is, over the same period. An example: A stock in your portfolio makes a 10% return, but the stock market is only making 6% over the same period; therefore, you would receive an abnormal return of 4% more on your portfolio. But, when the abnormal return is less, the opposite occurs and you are making less than the stock market, you have invested...

    Above Par Stocks

    Above Par - A bond that is purchased at an above par price can have two results when it reaches maturity. Either it will have a greater face value or a lesser face value, depending on whether stock market interest rates have risen or fallen after the bond was purchased. If the stock market rates have raised the coupon paid, value of the bond, will exceed the discount rate, cost to purchase; therefore, you will have made a tidy profit. However, if the stock market interest rates have fallen, you will take a capital loss since the bond can only...

    Asset-backed Security (ABS)

    Definition: Asset-backed securities are debt securities that are backed by assets other than real estate.  This includes receivables, loans, leases, royalties, etc. Advice: ABS's are great because they offer an alternative to investing in just typical corporate debt.  However,...

    Absolute Priority Rule

    Absolute Priority Rule - The absolute priority rule kicks into play on the stock market when an event occurs that forces a business into a liquidation or re-organization. Unfortunately, for the shareholders in the business, creditors get to dip their fingers into the pot and retrieve the full balance of what they are owed; whereas shareholders only receive compensation after the creditors have been paid out and generally, they receive only a percentage of what is owned to them. Therefore, when it comes right down to it, being a shareholder is rather a big gamble once the business gets in...

    Accounting

    Definition: Accounting is a field that is responsible for generating financial reports about a company's performance and financial health.  These reports are used both in-house and by outside parties. Advice: When it comes to investing, accounting is one of the most important fields to learn because it's important to be able to read financial statements.  Accounting in the US follows Generally Accepted Accounting Principles (GAAP).  Managerial accounting is used by people within the company to make financial decisions, while financial accounting is typically used by outside investors and lenders.  ...

    Acid-Test Ratio

    Acid-Test Ratio - The acid-test ratio is the value of a company's total assets, less the value of their inventory, compared to the total value of their current liabilities. By using this ratio, which is a stringent measure, you are able to tell how well the company is meeting its obligations over a short-term period. So, basically this ratio only takes into account how much liquid cash is available, inventory is not cashable therefore it is subtracted from the liquid cash value, creditors can tell how much short term debt the company is carrying and how quickly it can be...

    Acquired Surplus

    Acquired Surplus - The acquired surplus of any company is the excess of assets that remain when a company is set to merge, with another company, to provide the net worth of the company, but does not including all shares that represent company ownership. This is an accounting method, which combines the balance sheets of both companies that are merging, so that the two companies can be combined, merged, on the tax return without having an impact on the taxes of either company. Therefore, in order for this to happen, certain circumstances must exist, or the tax collectors will not...

    Acquisition

    Definition: An acquisition is when one larger company purchases a smaller company.  Not to be confused with a "merger", which is when two approximately equal-sized companies merge to combine forces. TeenAnalyst Advice: Usually, the company that is being acquired typically sees its stock price appreciate right after the news is announced.  The company ...

    Across The Board

    Across The Board - Across the board is a stock market action, or movement, that affects most or all of the stocks on the board in the same way. Therefore, if an ?Across the Board? occurs, the majority, or all, the stocks on the stock market will either go up or go down. It is similar to when you are watching television and suddenly all the people in a crowd stand up and start to do ?the wave? - it is affecting them all the same was, as they are all doing this same thing, at the same time, only...

    Acting In Concert

    Acting In Concert - Acting in concert is like a pooling effort between investors. A group of investors' work together picking identical stocks, bonds, and other investments, in an attempt to obtain a common investment target. Usually this occurs when two or more investors or company's wish to have some control, or influence, over another company's corporate level decisions, or they may be wishing to take over the company. They do this by coming together to purchase a large amount of shares in the company they wish to have some influence over. By doing this, the investors or companies hope...

    Active Management

    Active management - Active management is a term used to explain a money management approach based on intelligent and informed judgment on managing investment needs. Active management is the opposite of passive management, which means to rely on indexing. In indexing, the stock portfolio is set up to mimic an index such as the S&P?s 500. An active share is a program that was set up to survey the performance of mutual fund managers engaged in active management. Before 2006 mutual funds managers were said to be under performing. An active share is calculated as a percentage of the investments...

    Active Portfolio Strategy

    Active Portfolio Strategy - An active portfolio strategy is kind of like playing the horses or gambling at the casino. This involves an investor who uses a variety of techniques, forecasting and assumptive, to determine which investments to bet on, purchase, in order to get a high return, payout. Unlike investors who buy and hold their investments, these investors are more like day traders, who purchase and sell frequently moving profit, capital, from one investment into another investment he deems a more profitable investment gamble. So, the question here is...who'd have guessed the stock market could be as exciting as...

    Additional Paid-In Capital

    Additional Paid-In Capital - An additional paid-in capital would be additional capital that is paid into a corporation by investors over top of the par value of the capital stock. So, basically, it is the additional money the corporation received from investors over the value of the stock at the day's closing price. This is also called contributed capital, because the investors are contributing additional money to what is required, or paid-in capital, which in either case, is an additional investment in the company by investors....

    Adjustable Rate Preferred Stock

    Adjustable Rate Preferred Stock - A preferred stock with dividends that change, mainly quarterly, in accordance to changes that take place with Treasury Bill rates, or another benchmark, which is a standard the stock market uses for comparison. For example, Nasdaq could be used as a benchmark to what performance of a technology stock is compared to. A pre-set formula dictates the changes that take place with the preferred stock. Some changes that might affect it are floating rate debt, although adjustable rate preferred stocks have a tendency to have stable pricing. This is mainly because the amount of the...

    ADR

    Definition: ADR stands for "American Depository Receipt" and it's essentially stock of a foreign company held by a bank or trust.  ADR's allow US residents to easily purchase shares in companies in other countries.  Typically, an investor who wants to invest in a European stock (for example), would need a European investment account to do so.  ADR's allow investors to bypass this and buy the stock directly in the US. TeenAnalyst Advice: ADR's are very convenient ways for US investors to buy international stocks.  For example, Nokia is a company not based in the United States but you can still buy...

    Advance Detection System

    Advance Detection System - Advance Detection System, which is also known as ADS is a computer detection system that is utilized by the NASD, also known as the National Association of Securities, which systematically monitors execution orders made by firms, and trades, to prevent irregularities which may be prohibited by stock market regulations. The system was established in 1997 and monitors over two million transactions on the Nasdaq stock market. This system handles a large percentage of the market, which previously was not monitored on a continual basis. The system is called ACES, also known as Computerized Execution System....

    Affiliated Chains

    Affiliated Chains -   affiliated chains are retail operations that are none competing with each other, and act as a single entity when purchasing services and goods.  Affiliated chains pool their purchase in order to obtain a volume discount on their purchases, lowering their costs, and therefore increasing their profit.  No single affiliate has authority over the other one, and in some cases have a third party overseeing operations…Affiliated chains operate as a single business in a normal retail operation, but ban together with their affiliates to lower cost of doing business...

    Affiliated Person

    Affiliated Person - An affiliated person is a person who is able to insert influence on a corporation, of any size, based on a resulting minority ownership. Usually a minority ownership consists of owning less than fifty percent of the corporations voting stock, which is not enough ownership to have a controlling influence, although with exertion, influence tends to make changes possible in all areas. This person can influence decisions being made that affect the operation of the corporation, daily functions of assorted divisions within the corporation, or other decisions that may influence things with the stockholders....

    Affiliated Wholesaler

    Affiliated Wholesaler - an affiliated wholesaler is a non retail, and non competing company, acting   as a single business entity, when purchasing goods and services, to reduce costs by aligning themselves with other wholesalers.  The advantage of being an affiliated wholesaler is when pooling themselves with other non competing wholesalers; they can purchase goods and services in larger volumes.   By doing so, the affricated wholesalers will receive volume discounts, even thought they act as a single entity., therefore increasing their profit margins, and keep costs of goods down to pass on to the retailers...

    Aged Fail

    Aged Fail - Aged fail is a security transaction that has failed to be completed over the required thirty-day period. This happens, generally, when one of the involved parties fails to deliver the cash, or the securities, within a specific time period, generally the thirty days mentioned previous, although the period is adjustable, depending on the agreement between the two parties. The party failing to deliver on their promise, within the period specified, is subject to penalties enforced by the Security Exchange Commission, and loses credibility when wishing to complete other transactions, so timeliness in this situation is paramount....

    Agency Pass-Through

    Agency Pass-Through - An agency pass-through is a specific type of pass-through security, which is a security that represents a combined debt obligations that provides income from debtors to the shareholders, guaranteed by a government agency. The most common of these are mortgage-backed certificates. Mortgage back securities were first issued in 1970 and have been commonly used since then. These agency pass-through securities are much different from the conventional pass-through securities, which are backed by mortgages, but are not guaranteed by one of the government's agencies. These conventional pass-through securities are also called private label pass-through securities....

    Aggregate Corporation

    Aggregate Corporation - An aggregate corporation is a corporation, of varying sizes, that has more than one shareholder. As we, all know a corporation is a separate entity from the person who owns it, and generally, an aggregate corporation, although still a separate entity, has two or more shareholder; whereas a corporation has a sole shareholder, mainly in the form of the person who owns it. The reason people incorporate their companies is because this way they have limited liability and provides the company a separate legal footing from its owners. By incorporating their companies, the owners sustain protection to...

    Aggregate Risk

    Aggregate risk - An aggregate risk consists of the sum of exposure a client has to actions of spot contracts, which are calls for the immediate delivery and sale of currency or other spot communities, which are bought and sold, in a spot market, with an expected delivery date that is outlined on the contract. An aggregate risk is also called a market risk, undiversified risk, or an associate risk. These risks have their own methods and processes and deadlines must be met or there are consequences that can be...

    Aggressive Growth Fund

    Aggressive growth fund - An aggressive growth fund is a mutual fund with the goal of making the most capital gains. This would include taking on some high risk endeavors to achieve that goal. Many of the companies that show a very high growth fund also show a lot of share price fluctuations and therefore are considered high-risk investments. Aggressive growth fund investments seem to correlative with the general condition of the market so when the market is up they are up and vise versa. Aggressive growth funds will employ several means to achieve high profits, for example, investing in...

    Ahead Of Itself

    Ahead Of Itself - An ahead of itself is a phrase or expression that indicated that a security has been overbought or undersold. This usually refers to the following example. Let's say the actual value of the company happens to be about ten dollars, yet the shares for that same company are trading at around fifteen dollars, then the stock that is trading at a higher price than the companies intrinsic value, would be considered to be oversold, also called ahead of itself. Usually, this expression is only used when referring to listed securities, which appear on the stock market...

    Ahead Of You

    Ahead Of You - An ahead of you is a term used to note a specific status, or standing, of a security order to be executed at the same price to another trader, but that will be listed behind the other trader's order in the specialist's book. This book is a record book that chronologically records the inventory of securities, and the orders placed by other exchange members. This is so that each security in the inventory has an exchange member associated with it. This specialist's book is also referred to as the book?one to be kept accurately....

    Air Pocket Stock

    Air Pocket Stock - An air pocket stock occurs when an action takes place that causes the stock market to fall unexpectedly. Usually this action is stimulated by an unexpected drop in a stock price on the market and generally happens after the shareholder have been given the disappointing and sometime shocking news about the company. This air pocket stock is called this because it is like hitting an air pocket when you are cruising along in a jumbo jet. First the air is there to hold you up, then poof it is gone, and you drop like a rock,...

    Alan Greenspan

    Definition: Alan Greenspan is the chairman of the board of governors for the Federal Reserve.  He's entrusted with controlling the money supply and interest rates in order to keep the economy stable and inflation under control.Advice: Alan Greenspan holds one of the most important positions in the US Government.  The decisions he makes ultimately control the economy.  This is why investors closely watch what he says.  When he chooses to lower rates, money becomes "cheaper" and the economy heats up with economic activity.  The problem is that this comes with a price: inflation rises as well.  In order to combat...

    Allocation Efficiency

    Allocation Efficiency - Allocation efficiency is defined by how effective an economy or a market is in the dispersion of its capital. The dispersion of capital refers to the distribution of values related to specific categories whether they be standard deviations, ranges, or averages used to calculate in statistical date. Therefore, it is understood that a stock market that contains high allocation efficiency will be able to supply the necessary capital to various industries and promote the possibility for growth. Necessary capital is deemed as capital needed to maintain a certain standard, depending on the norms set by a industrial...

    All or None (AON)

    Definition: An All or None (AON) is an order that tells your broker that if you can't get all of the shares, to cancel the order.  Sometimes when there's a lot of demand or too much supply for a stock, it's hard to buy or sell exactly the number of shares of stock that you want.  For example, if you want to buy 1000 shares and only 500 shares are available, you would only get 500 shares.  An AON trade prevents this from happening. TeenAnalyst Advice: If you are placing a large order and don't want to worry about having your...

    All or None Underwriting

    All or None Underwriting - All or none underwriting is a type of securities an underwriter issues, but will cancel at his/her will if they are unable to resell the stocks. An example of this would be as follows: A well-known and experienced underwriter has plans to issue about one thousand stock shares of a specific security, but finds that he/she is only able to resell around eight hundred of these specific stock shares. The underwriter would then issue a cancellation order for the entire issue of those specific stock shares they were planning to issue, preferring not to take...

    Alpha

    Definition: Alpha refers to the abnormal rate of return for a security than what would be predicted using the Capital Asset Pricing Model (CAPM). Advice: When using CAPM, investors prefer to invest in companies that have positive alphas.  These are stocks that earn returns in excess of what is predicted based on the level of risk for the investment.  Negative alphas mean that the risks outweigh the return you would gain from the investment.    ...

    Alternative Minimum Tax (AMT)

    Definition: The alternative minimum tax (AMT) is an initiative that adds certain tax preference items back into a person or company's adjusted gross income (AGI). Advice: The IRS imposes an alternative minimum tax in order to ensure that wealthy individuals don't escape paying taxes by using tax shelters and other measures.        ...

    American Depositary Receipt

    American Depositary Receipt - An American depositary receipt, also known as a ADR, is a negotiable certificate that is issued by one of the American banks that represents a certain number of shares available through foreign stock trading on an American Stock Exchange. By trading ADRs, it is much easier for American corporations, companies, and the public to invest their money in foreign companies. This is especially true with the widespread availability of dollar denominated, prices that are done in a particular currency, pricing information, timely dividend distribution and transactions, and lower transaction costs. An example of denominated pricing -...

    American Stock Exchange

    American Stock Exchange - The American stock exchange, also known as AMEX, is the second largest stock exchange in the United States. The only one that is bigger is the New York Stock Exchange, also known as the NYSE. The American stock exchange rules are more lenient than the NYSE; therefore, the AMEX has a broader presentation of stocks and bonds issued by smaller companies, but some index options, and interest rate option trading also take place on the AMEX. Originally, the AMEX opened as an alternate to the NYSE. In 1998, the NASDAQ's parent company purchased the AMEX and...

    Amman Stock Exchange

    Amman Stock Exchange - The Amman stock exchange is a securities stock exchange that is located in Jordan and is the only trading securities company and formal stock market located within the country. This formal market enables the citizens of the country to purchase and sell, or trade transactions directly or through intermediaries that act on their behalf, which is common in all stock markets. When referred to as a public place, it means having shares available to the public in an open stock market. Since this country only has on stock market, its citizens do most trading here....

    Amortization

    Definition: Amortization refers to the gradual reduction of an intangible asset (such as goodwill) on the balance sheet.  It can also refer to the reduction of a debt by making regular payments (e.g. a home mortgage). Advice: When an...

    Amortized Value

    Amortized Value - The amortized value of any stock exchange security, which is determined by the process of amortization. Amortization is understood to mean the gradual depletion of a liability from the company's portfolio, such as a mortgage, loan, or lien against the company's property. The reduction of the liability occurs when the company makes regularly scheduled payments over a time specified in an agreement or contract. These payments are usually calculated to pay off both the principal owed and any interest that is occurred during the specified period. Just like when you buy a house through a bank?it is...

    Business Analyst

    Definition: A financial professional who analyzes investments.  They often research the company in depth and issue their recommendation on whether or not you should invest in the company. TeenAnalyst Advice: Analysts are nice because they analyze companies' stock as their career, so they can devote far more time to research than a typical ...

    Ankle Biter

    Ankle Biter - An ankle biter is a stock that is believed to be biting at the heels of larger market stocks with the hopes of passing the larger stocks and coming out with more. These stocks are generally issued on one company whose entire market value is less than five hundred million dollars. These stocks have the opportunity to outperform stocks which are more speculative and can generally do much better especially during recessionary periods of time. These stocks generally do well and have good investment potential when times are tough, therefore many investors buy a certain amount of...

    Annual Meeting

    Annual Meeting - An annual meeting is a gathering of the owners and shareholders, usually held at the fiscal year end, where the past years activities and profits are discussed, and the future movement of the company is decided upon. This is also the time when directors in the company are elected by the shareholders. Annual meetings are preceded, by supplying year-end statements, and proxy statements, to each shareholder. A proxy statement allows the shareholder to vote on all initiatives and the board, even if he is unable to attend the annual meeting. This way the shareholder still has his...

    Annual Report

    Definition: Every year, a public company is required to publish a report that summarizes the year of business.  These annual reports usually provide investors with a lot of valuable information about the company.  They can be found pretty easily. TeenAnalyst Advice: Annual reports provide a lot of valuable information about the company.  ...

    Annual Turnover

    Annual turnover - The annual turnover is the percentage of which a mutual fund or other investment securities can replace its holdings every year. The annual turnover ratio is determined by dividing the dollar transaction value of the traded shares by the total shares in the portfolio for the year in question. The idea behind an annual turnover is to adjust the cash inflows and outflows and to report this level of trading movement with the mutual fund. A very active fund will have a high turnover level. High turnover levels will add to expense ratio of the mutual fund...

    Annuity

    Definition: An annuity is a type of investment that guarantees payments of specific amounts at specific times.  You can either receive periodic interest or a lump sum payment.  They come in two forms: fixed and variable.  Fixed annuities are like CD's that pay a set ...

    Antidilution Provision

    Antidilution Provision - The antidilution provision involves the current shareholders and allows them to have fractional ownership of the company they own shares in by purchasing a proportional number of future shares being issued within the common stock of the company. In American, most states only consider anitdilution provisions valid if the company's corporate charter outlines the details of how they are to be handled. This is also known as a subscription privilege, or right, as the shareholders have first rights to partaken in the future stocks, before they are issued on the public market....

    Any Part Of Order

    Any Part Of Order - An any part of order is a purchase or sells order created by an investor instructing a broker to break up the said order into smaller amounts, if it is deemed necessary. So, for example. Let's say an investor owns five thousand shares in a certain company that he wishes to sell. He would then issue a any part of order for those five hundred shares to a broker who would put them up for sale. The broker has been given the right by the investor to sell the shares are prices he can obtain;...

    Accounts Payable

    Definition: Accounts payable refers to the amount of money owed to a creditor for goods and services. Advice: Accounts payable are current liabilities because they must be paid within a year (often suppliers have far stricter time schedules).  In...

    Appraisal Ratio

    Appraisal ratio - An appraisal ratio is a ratio used to study a mutual funds managers performance with the mutual funds investments that he chooses. They higher the ratio, the better the performance of the manager. The job of the mutual funds manager is to pick the investments that will do better than benchmark performance of the mutual funds in the basket or do better than the market in general. What is compared is the funds adjusted return of fund assuming the market is at zero (alpha) to the residual standard deviation, which is the difference between the predicted values...

    Appropriation Request

    Appropriation Reqeust – an appropriation request is a document to officially ask for funds, for the purpose of starting an investment project...  The appropriation request is the initial stage and the formal request for the company to release the funds.  The request is written, and given to the proper management, along with the project plans.  The management team then reviews the plan, and financial costs, and makes a decision to either release the funds or decline the request...  Normal projects have a high start up cost, but genera rate a positive return over time...

    Annual Percentage Rate (APR)

    Definition: The APR is the stated rate that a lender charges you to borrow money.  For example, 1% monthly interest is 12% annual interest. Advice: Credit card companies are required by law to disclose the APR they are charging...

    Accounts Receivable

    Definition: Accounts receivable is an item on the balance sheet that shows how much the company is currently owed. Advice: When a customer places an order, the company books it as revenue and puts it in account receivable until...

    Arbitrage

    Definition: Arbitrage is defined as the simultaneous purchasing and selling of a stock to take advantage of inefficient markets.  Essentially, an example would be an investor buying a stock in the United States and shorting it in Europe, if it hasn't adjusted to the change in ...

    Arizona Stock Exchange

    Arizona Stock Exchange - The Arizona Stock Exchange, also known as AZX is an electronic stock exchange that enables purchasers and sellers to buy or sell stock securities directly to each other without the use of a broker, even after the stock market itself has closed. The Arizona Stock Market opened in 1990 in Phoenix, Arizona and closed in 2001. It would seem that it was deemed as not needed, due to the lack of volume and availability of the bigger stock markets....

    Arm's Length Market

    Arm's Length Market - An arm's length market is a financial stock market where parties engage in transactions that are separate, having no contact with each other, when buying and selling stock securities. In most cases, the majority of investors are never aware of who they are purchasing securities from, or who they are selling them too. This allows all transactions to be conducted on equal footing and keeps it fair to all who are participating in the buy and selling of securities. This also keeps a safe distance between the company issuing the stocks and the investors buying them....

    Ascending Triangle

    Ascending Triangle - An ascending triangle is a chart that is in a triangle pattern that is used for technical analysis and where the lower level continues to increase over a period of time, yet the top level stays relatively the same, also known as flat, simulating a resistance level. When the security's prices crash through the resistance level, it is a good indicator that it is a great time to buy, or to sit on selling the security, as the traders believe the security will still increase in value. The opposite happens on a descending triangle....

    A Shares

    A Shares - Class A shares as it pertains to mutual funds is one of several share classes. The most common ones are Class A, Class B and Class C. Class A shares carry a front-end load, which means there is a sales charge that is taken immediately from the purchase of your shares, and therefore reduces the amount of shares you will own. However, if you buy a certain amount of shares you can have what is known as a breakout. These shares come with several breakouts and will reduce the cost of the front end load. An investor...

    Asked Price

    Asked Price - The asked price is the lowest price that an investor or a dealer has stated that they will sell a certain security or commodity for. On over-the-counter stocks, a security not traded at a stock exchange as it cannot meet listing requirements, the ask is the best quoted price that the market maker is willing to sell the stocks for. On mutual funds, the asked price is the net asset value and any sales charges. This is also known as the asking price or offering price....

    Asking Price

    Asking Price - The asking price is the same as the asked price, which is the lowest price any investor or dealer is willing to sell a certain security or commodity for. This doesn't include over the counter securities as they usually cannot make the listing requirements to be offered on the stock exchange. For mutual funds, the asking price is the net asset value and any additional sales charges; this is also called the asked price or offering price. These are generally the lowest price a market maker, bank or company, will take on the offered stock....

    Ask Price

    Definition: The ask price is the lowest price you can pay for the stock.  This is because it's the lowest price any seller is offering their shares of stock for.  Although the ask price might be $14, you might pay slightly higher if you put in a large order. TeenAnalyst Advice: It's important to understand that the price you pay for a stock may not be what it's quoted at.  Always look at what the company's ask price is when you're buying shares of stock.Some companies are very illiquid and have large spreads between the bid and ask prices.  For example,...

    Ask Size

    Ask Size - An ask size is the amount of shares, which are being offered for sale at a set price, the asking price. This is generally provided in terms of hundreds of share. Traders use this bid size and ask size to calculate the short term upward and downward pressure applied to the stock's price. Although this may work on stocks that are exchanged on the NYSE and AMEX, it doesn't work well on the Nasdaq. Usually you will find market makers, brokerage or firm that sets the bid price, ready to sell or buy shares, rather htan stock...

    Assembly Plant

    Assembly Plant – an assembly plant is the actual physical structure or location where a company has their production line.  This is where the company takes raw materials, and semi finished goods, and assembles them into a finished product.  The products are then shipped to another location where it is prepared or sold as goods.  An assembly plant could be one structure or several.  Certain assembly plants have different locations especially when dealing in large volumes or the product contains so many different parts, such as an automotive, or an agronomic assembly plant...

    Asset Allocation

    Definition: Asset allocation is the division of one's money among different assets.  For example, it would be dividing your money among stocks, bonds, mutual funds, and cash.  When people talk about "portfolios", they often mention the asset allocation. TeenAnalyst Advice: It's important to spend time considering your asset allocation.  ...

    Asset Allocation Fund

    Asset allocation fund - An associate allocation fund is actually a single mutual fund trying to reach the goals of asset allocation. Asset allocation means that investments would be diversified in order to achieve maximum profits. This type of fund will require the investments to come from various types of securities and classes of shares to develop a well-diversified portfolio with the intention of providing the investor with consistent returns. This investment strategy will save the investor from having to purchase large number of different funds to accomplish the...

    Asset Coverage

    Asset Coverage - Asset coverage is a measure of which a company's assets, net value, cover a company's debt obligations, plus/or preferred stocks. This value is similar information to what you would find on a company's profit and loss statement, although this is expressed in real dollar terms, and often express in percentages. In accounting, the profit and loss statement shows the owners or company's equity expressed in dollars, although it usually takes into account amortized long-term debts, as well....

    Asset Play

    Asset Play - An asset play is when a stock that is believed to be way undervalued, based on the value of the entire assets the company holds or owns. Specifically, they mean that the net value of all the company's assets are way higher than the company's market capitalization, which is obtained by multiplying the number of outstanding shares by the current value of the stock times the number of shares held by the company. Market value is the aggregate value of the company or the stock it owns....

    Asset Substitution

    Asset Substitution - An asset substitution is the investing of assets that hold a higher risk than what the bondholders, the owner of a bond who is given precedence over stockholders when it comes to asset liquidation - they are paid first, have approved of. An asset substitutions can lead to a problem called asset substitution problem, which could result in increased investor return, but an increased risk of company bankruptcy to the bondholders....

    Asset Substitution Problem

    Asset Substitution Problem - An asset substitution problem occurs when the shareholders insist that the company invest in assets that are much riskier than what the bondholders want to take risks on. Bondholders are paid first is a situation occurs that causes the assets of a company to be liquidated, before stockholders receive a cent. This riskier investment generally increases the return that the shareholders see, but also increases the risk that bondholders are forced to take, and could result in an increased bankruptcy risk....

    Assets Under Management

    Assets under management - Assets under management, is a strategy used by mutual fund companies, hedge fund, brokerages and insurance companies to determine their ratio of success in comparison to their competitors. These companies earn a management fee for investing their client?s interests. The investor assets, interest spread on investors deposits, or investments in the companies own funds are percentages of the assets under management. Therefore the total value of these assets combined, become the assets under management. An asset under management assessment is a good indicator of how well any manager is able to earn profits for their investors,...

    Asset Turnover

    Asset turnover - An asset turnover is a formula used to determine if a company is using its assets as efficiently as possible to generate maximum profit and or sales. The asset turnover will be the ratio for sales generated for every dollar?s worth of assets. The formula divides the number of sales in dollars by the assets in dollars. The higher the result will be the better. This formula also reflects the pricing strategy a company is using. Companies with high profit margins tend to have low asset turnover while companies with low profit margins have high asset turnover....

    Associated Person

    Associated person - An associated person is the world of stock markets and securities market means someone who is associated, or affiliated with a Nasdaq company. This person doesn't have to be registered with the NASD, in order to be associated. In futures markets this is a person who works with or is associated with a broker, futures commission merchant, or an advisor. This individual must register with the Commodity Futures Trading Commission or the National Futures Association in order to be recognized....

    Athens Stock Exchange

    Athens Stock Exchange - The Athens Stock Exchange, also known at the ASE, is the major stock market or exchange, which is located in Athens, Greece and is operated by a council utilizing seven administrators. The Athens stock exchange uses a modern electronic system, called OASIS, for trading its trade bonds and stock securities. The Athens Stock Exchange opened in 1999 and merge with the Athens' Derivatives Exchange to form the Athens Stock Exchange....

    At Par

    At Par - An at par is a preferred stock, a stock which provides a certain dividend which is paid before dividends are paid to common stock holders in the event of a company's liquidation, or a bond that is selling at the price that is equal to its face value. So nothing is made or loss on this ?At Par? bond or preferred stock. This is like an exactor at the horse races - it pays back exactly what it costs....

    At the Money

    Definition: An option is at the money when its strike price matches the price of the underlying stock.Advice: For example, if you bought a call option on XYZ with a strike price of $35/share when the stock was at $30/share, it'd be out of the money (worthless).  If the stock rose to $35/share, though, it'd be at the money.If you ignore transaction costs (the premium you pay to buy the option), the point where an option is "at the money" is the breakeven point.  ...

    Attribute Bias

    Attribute Bias - An attribute bias is the tendency of a valuation model that attempts to estimate the present value of all future payments from dividends to that of preferred stocks, which have alike characteristics and might include high dividend returns, high book values, lower P/E ratios, and other similar traits. These attributes can be useful when attempting to measure values that are rising or falling on stocks, which normally run along the similar value as preferred stocks. Some traders find these values very useful....

    Auction Market Preferred Stock

    Auction Market Preferred Stock - Auction market preferred stocks, also known as AMPS, are a type of preferred stock that the Dutch auction resets the dividend rate on. Generally, this means the interest rate on the preferred stock has a cap, or a ceiling, and that the Dutch auction may reset the reset rate of the dividends every forty-nine days. It is similar to a floating-rate investment, similar to a mortgage with a floating interest rate, and is usually tied to an outside indicator of movement, such as the prime interest rate....

    Australian Securities Exchange

    Australian Securities Exchange - The Australian Securities Exchange is the largest stock exchange in all of Australia, and is also known as the ASE, which opened for operation in 1987. Although its operations and functions have change with the times, it was transformed in 2006 after becoming the product in a merger with the Sydney Futures Exchange, also known as the SFE, and now offers a wide selection of securities, which are traded in this exchange....

    Authorized Participant

    Authorized participant - Authorized participants are large companies and other entities who that have been chosen by an exchange trading fund (ETF) sponsor to take upon themselves the responsibility of getting the underlying assets needed to create the exchange trading fund. Market makers and specialists in large institutions are often authorized participants. The authorized participant plays a crucial role in the development of an exchange-trading fund. They must secure large blocks of underlying shares of equity and other assets for the success of the exchange-trading fund. A second function of the authorized participant begins when the block of underlying securities...

    Authorized Stock

    Authorized Stock - Authorized stock is the total number of stocks or shares a company can issue, or sell. This number is specified in the company's charter, although the shareholders of the company can authorize that number to be changed by voting on the constitutional charter changes at an annual or general meeting. These stocks are also known as authorized shares. Once the shareholders approve the change in the company's charter, the company can sell more shares....

    Automatic Investment Plan

    Automatic Investment Plan - An automatic investment plan is a program enabling an individual to a predetermined amount electronically sent from one account to another as a regular or specified frequency. Some of the products, but not all of the products, that one can transfer would include stocks, mutual fund re-investment programs, defined contribution plans, and automatic withdrawal plans, which are also known as systematic investment plan....

    Automatic Pit Trading

    Automatic Pit Trading - Automatic pit trading is also known as Automated Pit Trading or APT, which is a trading system that is electronic and is used by the London International Financial Futures and Options Exchange, also known as LIFFE, to replicate the outcry method, verbal yelling on the trading floor, for trading securities. This automated pit trading came into effect in 1989 as a platform of choice. By using this method, it extends the trading day for orders and futures contracts....

    Automatic Reinvestment Plan

    Automatic reinvestment plan - An automatic reinvestment plan is a reinvestment program where all capital gains or other income is used for reinvestment purposes. In terms of mutual funds, what would happen is that all capital gains received by the fund would be reinvested to buy more shares, instead of the investor taking the cash. The investor will use an automatic reinvestment plan to generate the capital needed to buy more shares and this is a relatively easy method because the investor does not have to go out of pocket to do this. At the same time the investor takes...

    Automatic Withdrawal

    Automatic withdrawal - An automatic withdrawal is mutual funds program where the investor chooses to have fixed payments from the holdings in his or her mutual fund holdings. These payments are usually taken out on a monthly or quarterly basis. The automatic payment will come from the dividends, short-term capital gains, and the income on any securities, which the fund would be holding for the investor. An exception to the fixed payments given out monthly or quarterly is that any capital gain on long-term securities which the fund is holding can only be paid out an a yearly basis once...

    Autoregressive Conditional Heteroskedasticity

    Autoregressive Conditional Heteroskedasticity - An autoregressive conditional heteroskedasticity, also known as ARCH, a model in econometrics used to analyze and to predict the volatility, which is the rate relative to which the price of a security moves down or up on a daily basis. These volatile fluctuations tend to appear in clusters when viewing them over time. These calculations include the historical data of a cluster, and then use them to calculate the future volatility by looking at probability distributions related to a variable like price. This lends some predictability to trends that occur in clusters....

    Average Daily Volume

    Average Daily Volume - The average daily volume is the number of shares that are traded each day on the stock exchange averaged over a certain period of time. The time is generally averaged over a one-year period....

    Average Down

    Average Down - The average down means that the stockholder who is buying additional shares in stock that is already in his/her portfolio, has dropped in price since the he/she purchased of the earlier stock. These stocks are generally owned, a long position, or owed, a short position, by an investor or dealer and are often used to predict the financial health of a company....

    Average Price Per Share

    Average price per share - An average price per share is a method of determining the taxes that have to be paid on mutual fund redemptions (the return on the principal) or prior to maturity. The simplest explanation for computing the average price per share is to divide the cost of acquiring the shares by the total amount of shares acquired. Computing the average cost per share can appear complicated if the investor has purchased different quantities of shares at varying prices, for example 300 shares at 10.00 a share and 450 shares at 25.00 a share. However, by adding...

    Average Shareholder's Equity

    Average Shareholder's Equity - The average shareholder's equity is a calculation used to determine the shareholders' equity component, which is usually a variation of the return on the amount of equity formula and tells how well the company is doing at reinvesting earnings to generate additional earnings that is equal to the fiscal year end's after tax income. This formula is based on the adding the shareholders equity at the beginning of this period compared to the shareholder's equity at the end of the same period, and averaging the total....

    Average Shares Outstanding

    Average Shares Outstanding - The average shares outstanding are the average number of common stock shares that have not sold, or been issued, during a given period of time, or timeframe. This number may fluctuate with the purchase of the stocks purchased. Usually this occurs when the company issued shares are not sold during this period; therefore, there are company issued shares still remaining for sale during a given period of time, which makes those unsold shares outstanding on the companies balance sheet....

    Average True Range

    Average True Range - The average true range is also known as an ATR. This is an indicator, technical in nature, which tries to show the volatility of any given security. To arrive at the average true range, you have to subtract the day's lowest value from the day's highest value. Although, you must use the previous day's closing value, if it is an increase from the day's high value or a decrease from than the day's low value, which provides the exponential moving average of the true range after it has been calculated over a fourteen day period. High...

    Average Up

    Average Up - The average up is when you purchase more shares of a certain stock, which you already hold in your portfolio, and that have risen in price since the last time you purchased these same stocks. Generally, stocks are owned, which is considered a long position, or stocked are owed, which is considered a short position, by dealers and investors and are generally a good measure of the company's health....

    Average Weighted Maturity

    Average weighted maturity - The average weighted maturity is the weighted average of time it will take all mortgages in a mortgage-backed security fund to come to term or mature. The higher the average weighted maturity the longer it will take for the securities to mature on average. The average weighted maturity is also called an average effective maturity. To determine the average weighted maturity you would calculate the average mortgage value by dividing it into the total of all mortgages in the fund. The average weighted maturity is a measure used to determine how sensitive a fixed income fund...

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    Definition of the Day Panic Selling

    Panic Selling - Panic Selling is the opposite of panic buying in that a rush of selling in particular with stock securities or stock securities as a whole. Panic selling accompanied by a particularly heavy volume and sharp decline in price to the stock securities as the shareholders and investors...

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