Exchange Traded Fund (ETF)
A collection of stocks, bonds, or other investments[securities] that trade like stocks.
mutual fund
fund that pools the savings of many individuals and invests this money in a variety of stocks, bonds, and other financial assets
Securities
investments that alllow you to own things without physically holding it. examples are stocks and bonds.
stock
a share or percentage of ownership in a company
bond
a reverse loan
a loan-like agreement to a government or company to pay back a borrowed amount with interest.
a certificate issued by a government or company to pay back a borrowed amount at an agreed upon interest rate.
Total Expense Ratio
A measure of the total costs associated with managing and operating an investment fund, such as a mutual fund. These costs consist primarily of management fees, trading fees, legal fees, auditor fees and other operational expenses.
SIMPLE IRA
a "401K-like" plan that small businesses can offer to their employees.
an employer matching retirement account [IRA Individual Retirement Account] that small business' can offer to their employees.
The requirements are as follows:
employer is required to match some percentage of employee contributions
account must be established by October 1st.
eligibility: doesn't have to be full time Employee. Qualified Employees make >5K; Employer can choose when Employee qualifies 6 month- 2 years of service;
matching: Mandatory employer matching; can choose to match at least 2% of pay non-elective [whether employee contributes or not] or 3% matching contribution[rule is that you can match 1% in two consecutive years]
IRA is vested: Employee can take IRA and leave anytime. No minimum amount of years before taking money with them
Employer & Employee contributions are tax deductible.
tax deductible
able to be deducted from taxable income when calculating income tax due.
NASDAQ
A nationwide electronic system that links dealers across the nation so that they can buy and sell securities electronically.
National Association of Securities Dealers Automated Quotations
OTC security markets
A network of security dealers connected by a communications system of telephones and computer terminals that provides price quotations on individual securities.
Portfolio Turnover Ratio [Rate]
a funds holding period.
A number indicating how long a fund holds securities before buying, selling or exchanging them for a new set of securities.
If a fund has a turnover rate of 100%, it holds its securities, on average, for less than one year. Therefore, all gains are likely to be short term and subject to the maximum tax rate.
a portfolio with a turnover rate of 25% has an average holding period of four years, and gains are likely taxed at the long-term rate
the higher the turnover ratio the more often the fund manager buys and sells securities.