Stocks, Bonds, Mutual Funds

Market Index

A market index is a grouping of stocks whose collective performance is meant to suggest the performance of the market as a whole. It is used as a tool to represent the characteristics of its component stocks.

Mutual Fund

A professionally managed investment vehicle that pools money from many investors and invests in stocks, bonds, short-term money market instruments, and/or other securities.

Stock Market

A public entity for the trading of company stock at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

Stock Broker

A regulated professional who acts as a middleman investors by buying and selling shares in stocks and other securities.

Bond (Corporate)

A bond issued by a corporation. The term usually applied to longer term debt instruments, generally with a maturity date falling at least a year after the issue date.

Bond (Municipal)

A bond issued by a state, US territory, city, local government, or their agencies. Interest income received by holders of municipal bonds is often exempt from the federal income tax and from the income tax of the state in which they are issued, although municipal bonds issued for certain purposes may not be tax exempt.

Bond

A debt security in which the issuer owes the bond holders a debt and is obligated to repay the principal at a later date, called maturity, plus interest at regularly scheduled intervals.

Bond Market

A financial market where participants buy and sell debt securities, usually in the form of bonds.

Stock

A share of ownership in a corporation. Stocks typically takes the form of shares of common stock (or voting shares). Preferred stock differs from common stock in that it typically does not carry voting rights but is legally entitled to receive dividends before any dividends are issued to other shareholders.

Stock Exchange

An organization that provides facilities for stock brokers and traders to trade company stocks and other securities.

No-Load Mutual Funds

Mutual funds that can be purchased without paying a sales charge.

Load Mutual Funds

Mutual funds that require payment of a broker commission at the time of sale, taken as a percentage of funds invested. The value of the investments is reduced by the amount of the load.