Representative Market Indices
Dow Jones Industrial Average: tracks the performance of 30 of the largest U.S. “blue ship corporations and is considered a leading economic indicator of the market as a whole.
S&P 500 Index: tracks 500 financial, industrial, transportation, and utility company stocks. The S&P 500, an important benchmark for large-cap stocks, is a “value-weighted” index, giving stocks with the greatest market value the greatest weight.
NASDAQ Composite Index: measures more than 3,000 domestic and international stocks traded through its electronic system.
Wilshire 5000 Total Market Index: comprises nearly all stocks traded in the U.S.
S&P Midcap 400 Index: tracks the performance of stocks from 400 medium-sized U.S. companies.
Russell 2000 Index: tracks 2,000 small company stocks.
NYSE Composite Index: follows stocks listed on the New York Stock Exchange and in four subgroup indexes: industrial, transportation, utility, and finance.
Morgan Stanley Capital International EAFE Index: tracks non-U.S. companies in Europe, Australasia, and the Far East.
Barclays Capital U.S. Aggregate Bond Index: tracks the investment grade, fixed rate taxable bond market.
Terms in Alphabetical Order
A tax-deferred retirement savings vehicle that is issued as a contract between an individual and an insurance company. An annuity provides a variety of income options, including a payment one cannot outlive. May be fixed, immediate or variable.
An entity (either a person or an institution) named by the investor to inherit their estate or part of their estate after death.
A certificate representing creditorship; the issuer pays interest on specific dates and redeems by paying the principal at maturity.
Cash distribution (declared by a corporation’s board of directors) paid to current shareholders of record. This is normally a portion of the corporation’s earnings, however a corporation may pay a dividend even if it does not have earnings.
CERTIFICATE OF DEPOSIT (CD)
An investment vehicle whereby you lend a bank or a savings and loan a set amount of money, which is then invested in securities or used for loans. For the use of your money, you are ensured the return of your principal at maturity withinterest over the life of the CD. CD’s offer a varietyof maturities and interest payment options.
Share of a public corporation. Owners are usually entitled to receive dividends and vote on important company matters. Should the company be forced to liquidate, assets are distributed to creditors, bondholders and preferred stockholders before common stockholders. Common stocks are usually purchased for their appreciation potential and possible dividend income.
CONSUMER PRICE INDEX
The price of a hypothetical basket of goods selected to represent the types of prodects purchased by typical consumers. It is used as a measure of inflation.
A loan to a corporation. When you invest in a bond, the corporation pays you interest on the bonds you own. At a stated date in the future (maturity date), the company returns your principal to you. The maturity dates on corporate bonds can range from one to 40 years.
An account established for a child that is not of legal age. The account must use the name of the minor child as well as one adult, or custodian. A custodian is an adult acting on behalf of a minor in a security account.
An equity-linked CD is an FDIC-insured certificate of deposit that ties the rate of return to the performance of a stock index such as S&P 500 Composite Stock Price Index. The terms vary. If the market does well, the interest on the CDs reflects that market performance. If the market takes a downturn, the principal is protected.
Our advice: as with all investments, talk to your investment advisor about the product prior to investing.