Investment Word

After-Tax Yield (Bonds)

questions@atlanticfinancial.com — Wed, 30 Jan 2008 17:16:06 -0500

After-Tax Yield is the true yield that an investor receives after paying taxes on bond income. This yield is used to evaluate the benefits of owning taxable versus tax-exempt bonds.

Leadership

questions@atlanticfinancial.com — Fri, 11 Jan 2008 17:54:30 -0500

When used to refer to a company or venture, Leadership is the upper level of management that provides vision and direction for the company.

Treasuries

questions@atlanticfinancial.com — Wed, 21 Nov 2007 11:11:04 -0500

Treasuries are government bonds issued by the Federal Government that have the benefit of being guaranteed by the Government, but also the drawback of low interest rates.

Organized Labor

questions@atlanticfinancial.com — Tue, 20 Nov 2007 09:30:24 -0500

Also known a 'union', Organized Labor refers to an association of workers united as a single, representative entity for the purpose of improving the workers' economic status and working conditions through collective bargaining with employers. There are two types of organized labor: the "horizontal union" where all members share a common skill and the "vertical union" which is composed of workers from who are all in the same industry.

Swap (Bonds)

questions@atlanticfinancial.com — Mon, 19 Nov 2007 11:40:03 -0500

A Swap is the exchange of one bond for another. Generally, this is to establish a tax-loss for income tax purposes and replacing the bond sold with one of comparable value. There are strict guidelines for a swap to qualify as a tax loss for reporting purposes.

Index Fund

questions@atlanticfinancial.com — Thu, 15 Nov 2007 10:54:44 -0500

A Bear Market is a long term retreat in stock market prices. One example of this is the great bear market of the early 1970s.

Bear Market

questions@atlanticfinancial.com — Wed, 14 Nov 2007 09:04:09 -0500

A Bear Market is a long term retreat in stock market prices. One example of this is the great bear market of the early 1970s.

Municipal Bond Fund

questions@atlanticfinancial.com — Tue, 13 Nov 2007 16:53:18 -0500

A Municipal Bond Funds is a portfolio of municipal bonds sponsored by a registered investment company that offers shares of a portfolio of municipal bonds whose size will very as shares are purchased or redeemed.

IPO

questions@atlanticfinancial.com — Tue, 30 Oct 2007 14:49:16 -0400

An IPO (Initial Public Offering) is the term used to refer to the first time a company's stock is available for public purchase - this can be on an exchange or a private offering. IPOs have great appeal for many investors because of the ability to invest 'on the ground floor' of a newly funded company.

Discount Rate

questions@atlanticfinancial.com — Fri, 19 Oct 2007 10:51:16 -0400

The Discount Rate is the interest rate the US Federal Reserve charges member banks to borrow money.

Federal Funds Rate

questions@atlanticfinancial.com — Thu, 18 Oct 2007 10:04:40 -0400

The Federal Funds Rate is the interest rate that banks charge one another for overnight loans.

Allocation (Bonds)

questions@atlanticfinancial.com — Tue, 16 Oct 2007 15:32:43 -0400

In the case of bonds, an Allocation is the quantity of bonds an underwriter, selling group member, or customer receives on a new issue order. In the event an issue is oversubscribed with more orders than bonds in a particular maturity, the senior manager may award only a percentage of the order that has been placed.

Put (Options)

questions@atlanticfinancial.com — Mon, 15 Oct 2007 10:32:13 -0400

A Put is a type of option designated for sales of securities. The Put is an agreement to exchange ownership of a stock at an previously agreed price. Additionally, this exchange happens within a pre-determined period of time.

Asset Management

questions@atlanticfinancial.com — Thu, 11 Oct 2007 10:21:43 -0400

Asset Management is the process of deferring the day to day management of assets to a professional money management team. The concept of Asset Management is similar to the a mutual fund, except assets are not pooled with those of other investors.

FINRA

questions@atlanticfinancial.com — Thu, 4 Oct 2007 14:58:50 -0400

The Financial Industry Regulatory Authority (FINRA) was created in July 2007 through the consolidation of the NASD and the member regulation enforcement & arbitration functions of the New York Stock Exchange (NYSE). FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services.

FINRA is the largest non-governmental regulator for all securities firms doing business in the United States, overseeing nearly 5,100 brokerage firms, about 174,000 branch offices and more than 672,000 registered securities representatives.

Maturity

questions@atlanticfinancial.com — Wed, 3 Oct 2007 09:17:50 -0400

A Maturity is the date when the principal amount of a securitybecomes due and payable.

Accrued Interest (Bonds)

questions@atlanticfinancial.com — Mon, 1 Oct 2007 14:06:11 -0400

Accrued Interest is coupon interest accumulated on a bond or note since the last interest payment or, for a new issue the dated date of delivery. When you buy a bond between coupon payments, you are only entitled to the interest a bond earns after you buy it. When the coupon pays, you get back the full amount including the accrued interest you originally paid.

Interest Rate

questions@atlanticfinancial.com — Thu, 27 Sep 2007 10:51:53 -0400

An Interest Rate is an amount which is charged (or paid) for the use of money. An interest rate is often expressed as an annual percentage of the principal. Interest Rates are calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. For example, if a lender (such as a bank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be: (90/1000)*100% = 9%

Loaded Mutual Funds

questions@atlanticfinancial.com — Fri, 21 Sep 2007 15:11:54 -0400

A Loaded Mutual Fund is a fund that has an up-front charge to purchase or a charge to sell the shares rather than built in charges only. Please note that bottom line performance (net of fees) is far more important than the existence of a sales charge

Default (Bonds)

questions@atlanticfinancial.com — Mon, 17 Sep 2007 10:30:48 -0400

Default is the failure to pay principle and/or interest to a bondholder when it is due.

Market Order

questions@atlanticfinancial.com — Tue, 11 Sep 2007 15:32:28 -0400

A Market Order is an order to buy or sell a stock at its current market price.

Escrowed To Maturity

questions@atlanticfinancial.com — Fri, 7 Sep 2007 09:30:52 -0400

Escrowed To Maturity refers to Bonds that have been refunded and a portfolio of securities, usually treasuries, have been set aside to pay of the bonds at maturity. Generally, all prior optional calls have been eliminated, or deceased. Because of the U.S. Treasury backing, Escrowed To Maturity bonds are considered the safest municipal bonds available and trade on the market as rich triple-A.

Note

questions@atlanticfinancial.com — Thu, 6 Sep 2007 14:28:02 -0400

A Note is a short term promise to pay specified amounts of money secured by sources of future revenues, such as taxes, federal and state aid payments or future bond proceeds. Maturities must be less than three years, but are generally issued with maturities of one year or less.

New Issue

questions@atlanticfinancial.com — Wed, 5 Sep 2007 10:57:11 -0400

A New Issue is a stock that has been recently issued onto a stock exchange. Also See: Initial Public Offering (IPO)

Debenture

questions@atlanticfinancial.com — Tue, 4 Sep 2007 15:26:15 -0400

A Debenture is an unsecured bond that is backed by the issuer's legally binding promise to pay interest and principle when due.

Balance Sheet

questions@atlanticfinancial.com — Wed, 29 Aug 2007 11:00:26 -0400

A Balance Sheet shows the assets and liabilities of a companies net worth. A Balance Sheet is extremely important for determining a companies net worth. It is worth noting that a Balance Sheet reflect a company's current status, not the long-term potential of that company.

Arbitrage

questions@atlanticfinancial.com — Fri, 17 Aug 2007 16:03:56 -0400

An Arbitrage is an advanced trading strategy of buying securities and usually selling them at a profit simultaneously.

Charitable Giving

questions@atlanticfinancial.com — Wed, 15 Aug 2007 15:51:14 -0400

Charitable Giving can take many forms, among them: sponsorship of local charitable events, donations of excess goods, and philanthropy in one or more areas through the establishment of a foundation or council. Many individuals engage in charitable giving, both as individuals and in through their employers.

Executive Compensation

questions@atlanticfinancial.com — Wed, 8 Aug 2007 10:58:03 -0400

Executive Compensation is the term used to refer to the wage and benefit packages that comprise the pay received by top executives of business corporations. Executive Compensation may also include options and other incentives based upon the company's earnings.

Advanced Refunding

questions@atlanticfinancial.com — Mon, 6 Aug 2007 16:54:37 -0400

Advance Refunding is a method for municipal authorities to issue bonds to pay off outstanding bond issues prior to the first call date. The proceeds are usually invested in Government securities which are placed in escrow until the call date of the existing issue when they are retired. This is primarily used to lower the interest cost for an issuer.

Incentive Trust

questions@atlanticfinancial.com — Fri, 3 Aug 2007 14:18:29 -0400

Incentive trusts are a legally binding fiduciary relationship in which the trustee holds and manages the assets contributed to the trust by the grantor. In an incentive trust arrangement, the trustee must adhere to specific requirements set out by the grantor regarding what conditions the trust's beneficiaries must meet in order to receive funds from the trust.

Venture Capital

questions@atlanticfinancial.com — Thu, 2 Aug 2007 14:08:56 -0400

Venture Capital is a form of fund raising for companies with difficulty raising funds by other means. It consists of investors (known as Venture Capitalists) giving money to a company in exchange for part ownership in that company.

Sinking Fund (Bonds)

questions@atlanticfinancial.com — Tue, 31 Jul 2007 14:48:07 -0400

A Sinking Fund is money set aside on a periodic basis to retire term bonds at or prior to their maturity. A schedule of future payments is required with the original bond resolution. This schedule illustrates the frequency and amount of bonds to be retired.

Margin

questions@atlanticfinancial.com — Mon, 30 Jul 2007 13:55:59 -0400

A Margin is a procedure allowing investors to borrow against their existing holdings to buy more securities. Usually the loan value is 100% of the account value. Thus the margin requirement, the amount needed in the account to keep it open is 50% of the value. In other words one can buy $20,000 worth of stock for $10,000.