Investment Glossary

30-Year Treasury Bond Yield
Benchmark against which all other bonds are measured. Backed by the full faith and credit of the U.S. government. The yield is the current rate of repayment per year.
Average Money Market Fund Yield
The one-year yield on a fund that works like a savings account. For every dollar invested the investor receives a dollar plus interest. The interest rates are high on these accounts when the overall interest rate is high and vice versa.
Average One-Year CD Yield
The average one-year yield on a certificate of deposit paid by major New York banks usually on amounts of $1 million or more.
Average U.S. Bond Fund
The average total return of U.S. government bonds.
Balanced Fund
A fund with specialized investment goals for balanced investing. Investing in a combination of stocks, bonds, and cash.
Blend Stock Funds
Invest in a combination of Growth Stock companies as well as Value Stock companies, always slightly overweighting the sector (growth or value) that currently occupies investor preference.
Commercial Paper
A money market instrument which is a short term promissory note issued by a corporation
Consumer Durables Sector
Includes automotives, house wares, multi-industry firms, recreation and luxury goods, rubber/plastic, shoes and leather, textiles, and textile manufacturers. Some examples of companies in this sector include General Motors, Maytag, Singer, Williams Sonoma, Toys R Us, Harley-Davidson, Tiffany, Goodyear Tire & Rubber, K-Swiss, Fruit of the Loom, and Wacoal.
Consumer Staples Sector
Includes cosmetics and grooming supplies, distillers, breweries, food and food production, meats, dairy, confections, and tobacco. Some examples of companies in this sector include Avon, Seagram, Adolph Coors, Chiquita Brands, Campbell Soup, Clorox, Procter & Gamble, Bob Evans Farms, Ben & Jerry's, Coca-Cola, and Philip Morris.
Dow Jones Industrial Average
A yardstick by which to measure the market performance of 30 large industrial companies over time. The 30 key companies are worth about 25% of the total value of all stocks on the New York Stock Exchange. Examples include: Wal-Mart, General Motors, Eastman Kodak, and McDonalds.
Energy Sector
Includes oil, oil-related services, and natural-gas services. Some examples of companies in this sector include Dresser Industries, Noble Drilling, DeKalb Energy, Chevron, and Pennzoil.
Financials Sector
Includes banks, insurance, investments, real-estate investment trusts, real estate, and savings and loans. Some examples of companies in this sector include New England Banks, American Express, PMC Capital, American Bankers Insurance, Reich & Tang, FNMA, United Capital, DPA, and York Financial.
Growth and Income Fund
A fund that primarily invests in companies that are producing income as well as potential for capital growth, usually invests in large companies.
Growth Stock Funds
Invest in stocks that carry higher price tags because they represent companies with potentially rapidly expanding earnings growth. Companies that consistently reinvest revenue in an effort to “grow” the company larger are generally growth companies. Examples: Microsoft, Dell Computers, AOL Time Warner.
Health Sector
Includes drug manufacturers, medical devices, institutional services, and drug wholesalers. Some examples of companies in this sector include Amgen; Becton, Dickenson & Company; Manor Care; Merck; Omnicare; Saint Jude Medical; and Upjohn.
Industrial Cyclicals Sector
Includes aerospace, building supplies, business equipment, chemicals, machinery (both light and industrial), metals fabrication (iron, steel, coal, and rare metals), paper and packaging, and photo equipment. Some examples of companies in this sector include Georgia Pacific, Caterpillar, Black & Decker, Toro, Magma Copper, and Eastman Kodak.
International Fund
A fund that invests in stocks primarily outside of the United States.
Large Cap Funds
Invest in the stocks of companies that are valued at more than $12 billion dollars. Example: General Motors, Microsoft.
Lehman Brothers Treasury Bond Index
An index that monitors the long-term Treasury bond market. The index calculates the average yield of long-term treasury bonds each day.
Mid Cap Funds
Invest in the stocks of companies that are valued at between $2 billion and $12 billion dollars. Example: Blockbuster Video, Charter One Financial.
Mortgaged-Backed
Pass through securities which provide investors with an undivided interest in a pool of debt securities. Providing liquidity to the mortgage market. Investors receive monthly payments of interest and principal as if they had purchased an individual mortgage from a commercial lender. FNMA (Fannie Mae) and GNMA (Ginny Mae) are the most well know secondary market makers for mortgage-backed securities.
Nasdaq Composite Index
A sophisticated electronic network used to make trades and as an index. There are 4,700 companies on the Nasdaq index from small emerging firms to giants such as Microsoft. Many Nasdaq holdings are in technology, telecommunications, and banking.
Prime Rate
The base rate on corporate loans posted by at least 75% of the nations 30 largest banks.
Repurchase Agreement
A method of borrowing funds in the short term. A borrower sells to an investor some of the borrowers inventory of securities and agrees to buy the securities back in a few days at a higher price. The higher price is the interest paid to the original owner while the securities act as collateral.
Retail Sector
This group consists of companies from several areas including apparel, department stores, food stores, and miscellaneous shops. Some examples of companies in this sector include The Gap, Sears, Spiegel, Starbucks, Best Buy, Audiovox, and Sharper Image.
Russell 2000
Represents the smallest 2/3 of the 3,000 largest U.S. companies. This includes many of the initial public offerings over the last couple of years.
Russell Growth & Russell Value
A similar index to the Russell 2000 using growth and value stocks respectively as a benchmark.
Services Sector
This group consists of companies from several areas including freight, airlines, business services, publishing, railroads, hotels, motels, resorts, restaurants, personal services, recreational services, and movies. Some examples of companies in this sector include Federal Express, Delta Air Lines, Kelly Services, Knight-Ridder, Skolniks, and H & R Block.
Small Cap Funds
Invest in the stocks of companies that are valued at less than $2 billion dollars. Example: Papa John’s Pizza, K-Swiss Shoes.
Small Company Fund
A fund with specialized investment goals for investing in small companies. More risk is involved in small company investing but the return potential is great. These companies usually have a market capitalization under $2 billion.
Standard & Poor's 500
A weighted stock index that incorporates a broad base of 500 stocks, these include 400 industrial companies, 20 transportation companies, 40 utilities, and 40 financial companies. Considered a benchmark for large stock investors. Examples include: General Electric, Coca-Cola, Microsoft, and Intel
Standard & Poor's Mid Cap
A stock index that incorporates 400 mid-cap stocks. Mid-Cap stocks are stocks with a greater growth potential than large companies; however they also provide more risk. Their market capitalization is usually between $2 and $7 billion.
Technology Sector
This group consists of companies from several areas including aerospace, business data processing, computer leasing, electrical equipment, specialized machinery, and precision instruments. Some examples of companies in this sector include Apple Computer, Pioneer Electronic, Sony, Silicon Valley Group, Arizona Instrument, and American Superconductor.
Utilities Sector
This group consists of companies from several areas including communications, electronics, and gas utilities. Some examples of companies in this sector include AT&T, MCI Communications, Gulf States Utilities, Pacific Gas & Electric, and Consumers' Water.
Value Line
The most widely distributed independent investment information service, tracks the performance of 1,700 common stocks.
Value Stock Funds
Invest in “bargain” or out-of-favor stocks that are inexpensive relative to company earnings or assets. Companies that can consistently turn a profit and generate revenue are generally “value” companies. Examples: General Motors, General Electric, Ford, McDonald’s.