Browse Terms Alphabetically

An investment that may offer substantial tax benefits in addition to an economic benefit in return for the investor's capital. At one time, certain tax-advantaged investments rested almost entirely on the tax-sheltering features of the investment. However, the Tax Reform Act of 1986 greatly reduced available tax advantages.

Income which is not subject to taxes. For purposes of the federal income tax, includes interest on most state and municipal bonds. Social Security payments, and $100 per year of qualifying dividend payments.

The most sweeping tax reform in the 73-year history of the federal income tax. Among the many changes it introduced are a two bracket tax structure, the elimination of preferential treatment for capital gainst and the elimination or reduction of tax benefits available to so-called tax-advantaged investments.

A form of co-ownership under which a decedent's interest in the property passes to his or her estate, not to the surviving co-owner. Contrast: Joint Tenancy

Mathematical consideration of yield that factors in both current cash flow from the investment and an ultimate capital gain or loss in terms of invested dollars. Called yield to maturity on bonds if the current cash flow is reinvested at the same rate. Most popular usage: an equity investment that sacrifices some current yield

The actual day when a trade is made between two parties.

An agent of a mutual fund whose duties include issuing new shares, cancelling redeemed shares and distributing the dividends and capital gains distributions.

Short-term U.S. government debt obligations. They are sold at a discount in competitive bidding with usual maturity dates of 13 weeks, 26 weeks and 52 weeks, but never more than 52 weeks. They are sold at a discount without interest.

Long-term securities of the U.S. government having maturity periods of 10 years and up. They have a stated interest rate which is generally paid twice yearly.

U.S. government paper with a maturity period of one to 10 years. They pay a stated interest rate and may not be called by the Treasury before maturity. However, because they are actively traded they can be purchased at either a premium or a discount.

Stock of a company which had been issued but later reacquired and held by the company, during which time it receives no dividends and has no voting power. It may be reissued to the public or retired.

A legal arrangement whereby one person, the grantor, transfers title to property to another, the trustee, to be held for the benefit of a third person, the beneficiary.

The person who holds legal title in property for the benefit of another.

Trailing commissions paid on dollars invested in participated funds. They are paid quarterly and each fund company varies on how long the assets need to be invested in order to pay this additional commission.