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BCD & EFG, H & I BCD & EFG, H & I
American Depository Receipts (ADRs) - Securities traded on the U.S. stock exchanges representing ownership of stock in foreign companies.
Annuity - An investment which has a number of future payments for a specified period of time.
Assets - Possessions having present or future economic value to the owner (cash, property, etc.)
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Bankruptcy - A legal determination that an individual or corporation is unable to pay debts. The law allows a period of time in order to pay creditors by reorganizing financial and business affairs under court direction.
Bear Market - A period of time during which security prices follow a downward trend. Also see: Bull Market and Risk.
Beta - A measure of a stock's volatility. A beta of 1.00 means that the stock price moves up and down in a one-to-one relationship with the market as a whole. A beta of greater than 1.00 means that the stock price moves up or down more than the market as a whole, and a beta of less than 1.00 means that the stock price moves up or down less than the market as a whole. See: Volatility.
Big Board - Nickname for the New York Stock Exchange.
Blue Chip - The stock of large and financially strong companies that have a good financial record, including the payment of stock dividends.
Book Value - A corporation's net worth measured by all assets less liabilities.
Bull Market - A period of time during which security prices follow an upward trend. Also see: Bear Market.
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Capitalization - The market worth of a corporation determined by multiplying the value of a share of common stock by the number of shares outstanding.
Certificates of Deposit (CDs) - Short-term money market instruments issued by banks and carrying a fixed interest rate to a set maturity date.
Common Stock -- A security that represents ownership in a corporation. Common stock shareholders can participate in corporate elections and share in corporate profits. Also see: Preferred Stock and Risk.
Consumer Price Index - A measure of the increase or decrease in the costs of goods and services.
Consuming - See: Social Consuming.
Contrarian Investing - Investing in the secrities of currently out-of-favor companies.
Co-op - A form of ownership where a buyer purchases shares in a corporation, partnership or trust and shares proportionately with other owners in the assets and liabilities of the common ownership.
Credit Union - A not-for-profit cooperative financial institution that is owned and collectively controlled by its members.
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Double Bottom Line - In addition to making a profit, investors and businesspeople also want their money to go toward positive social practices and programs. Also see: Ethical Investing.
Dow Jones Stock Averages - Statistical indicators of broad stock price fluctuations in the stock market published by Dow Jones & Company.
Environmental Investing - Some large commercial funds inexperienced with socially responsible investing have assumed that this means you simply invest in any company that has something to do with the environment. This is not a very good idea, as we point out in When Environmental Inversting Works, And When It Doesn't. Also see: Social Investing.
ESOP - An employee stock ownership plan whereby employees can purchase shares of stock in the company for which they work, either by cash payments or by withholding a portion of their pay.
Ethical Investing - Individual and institutional investors and businesspeople decide what their most important ethical values are and make their investment decisions or conduct their businesses to reflect these values, in addition to making purely economic decisions. This is what is called in socially responsible investing "the double bottom line." Also see: Alternative Investing and Social Investing.
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Form 10-Q - Unadited quarterly form that a company must file with the Securities and Exchange Commission.
Front-End Load - A sales charge as a percentage of the initial investment that a fund collects at the time that shares are first purchased in the fund. Also see: Load Fund.
Fundamental Analysis - Evaluating investments on the basis of the relationship between the current price of the company's securities and such factors as the condition of the economy, industry trends, competence of the company's management, employee practices and programs, etc. This is the opposite of Technical Analysis.
Futures - Contracts for the future delivery of securities or commodities at a set price and at a specified time.
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Greenwashing - The practice of companies making their products appear to be environmentally sound by putting them in green packages, claiming they are biodegradable (when they are not), etc.
Gross National Product - The market value of the goods and services produced in a nation.
Growth Fund - A fund designed to provide capital appreciation by investing in stocks with growth potential.
Holding Company - A company that owns and controls another company.
Indexes, Stock Market:
Individual Retirement Account (IRA) - A tax-deferred investment plan that permits a wage earner (and spouse) to save a portion of income for retirement and legally shelter income from current taxation.
Investing - See: Social Investing.
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Keogh Plan - A tax-deferred retirement plan for self-employed individuals.
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Liability - An actual or potential financial obligation.
Limited Partnership - A business where the partners are liable only to the extent of their original investment.
Liquidation - The sale of an asset or the closing out of a company, pension plan, or other investment.
Liquidity - The ability to turn assets into cash rapidly without a penalty.
Load Fund - A fund that has a sales charge for the purchase of shares. Also see: Front-End Load.
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Margin Account- An account permiting customers to buy securities with money borrowed from a broker.
Money Market Fund - A fund in which individuals' investments are pooled and the combined total is used by a professional money manager to invest in high-yield, short-term money market instruments such as CDs, corporate bonds, and government agency securities. Also see: Risk.
Mutual Fund - A fund in which individuals' investments are pooled and the combined total is used by a professional money manager to invest in primarily common stocks. Also see Risk.
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No-Load Fund - A fund that does not have a sales charge for purchasing or redeeming its shares. Also see: Back-End Load, Front-End Load, and Load Fund.
Odd Lot - Stock bought or sold in amounts less that the usual 100-share multiples.
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Par Value - The nominal or face value of a security (Usually much lower than the security's market value).
Preferred Stock - Stock that receives preferential treatment over Common Stock in terms of dividend payments and claims on assets in case the company goes out of business. However, preferred shareholders do not have the right to vote in corporate elections or share in corporate profits. The dividends that they receive are stated as either a percent of par value or as a dollar amount per share. In certain cases, preferred shareholders might be permitted to participate through limited voting rights.
Price-to-Earnings Ratio (P/E Ratio) - A measure of the price of a share of stock divided by the earnings per share of stock, designed to show whether or not the company's stock price is reasonable in terms of the company's earnings.
Put - See: Options.
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Risk:
Screening, Social - Applying social and/or environmental criteria to investments, in addition to purely financial criteria. Negative screening involves avoiding investments in companies with bad social and/or environmental records. Positive screening involves selecting for investment companies with good social and/or environmental records. See: How to Screen Investments for Social and Environmental Factors.
Securities and Stock - Certificate of ownership in a company. Also see: Risk.
Social Consuming and Socially Responsible Consuming - Avoiding the purchase of goods and services of companies with bad social and/or environmental records, and buying the products and services of companies with good social and environmental records. See: How to Spend for a Better World.
Social Investing and Socially Responsible Investing - In addition to using social decisions in the investment process, investors use strategies to change corporate programs and practices, such as shareholder resolutions in the proxy process. Also see: Alternative Investing and Ethical Investing.
Stock Market Indexes (see Indexes)
Technical Analysis - Evaluating investments by assuming that the future price of a security can be predicted by analyzing the past performance of the stock and the market as a whole. Technicians are "number crunchers." This is the opposite of Fundmental Analysis.
Ticker and Ticker Symbol - A trading screen that displays information about the current price, volume of trading, etc. for a particular stock, option, and the like. The symbol stands for the particular security that is trading on the exchange.
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Volatility - The degree to which the price of security goes up or down over a specified period of time. Also see: Beta.
Wrap (or Wraparound) - If a home has an assumable mortgage but the down payment would be extraordinarily large, a buyer can arrange for a wraparound mortgage. The original loan is combined with a new one, and there is only one monthly payment for the total loan. Of course, some down payment will be required. The interest rate for the wrap loan would be a mix between the assumable loan rate and the current market rate.
Zero Coupon Bonds - Bonds sold at a discount from their face value and that do not give the holder any periodic payments of interest prior to maturity.
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Alternative Investing - Investments in land trusts, cooperatives, community-based revolving loan funds, and community-based banks, all designed to make available traditionally hard-to-obtain capital for such programs as preservation of land for family farming and the construction of low- and moderate-income housing. Also see: Ethical Investing and Social Investing.
Back-End Load - A charge for redeeming the shares of a fund. Also see: Front-End Load, Load Fund, and No-Load Fund.
Call - See: Options.
Dividend Reinvestment Plan (DRIP) - Dividends are automatically reinvested in additional shares of the company's stock without having to use a broker.
Form 10-K - Audited annual form a company must file with the Securities and Exchange Commission stating full details of its financial condition and performance.
GOOD MONEY Stock Averages - Statistical indicators of broad socially screened stock price fluctuations compared to the fluctuations of unscreened averages such as the Dow Jones averages.
Amex Index - Composite index of shares listed on the American Stock Exchange.
Arms Index (also known as the Short-term Trading Index) - The average volume of declining issues divided by the average volume of advancing issues.
Dow Jones Industrial Average - The Dow tracks 30 stocks that trade on the NYSE (New York Stock Exchange) and is a general indicator of how shares of the largest U.S. industrial companies are trading.
Dow Jones Transportation Average - Tracks the stock performance of 20 airlines, railroads, and trucking companies.
Dow Jones Utility Average - Tracks the stock performance of 15 gas, electric, and power companies.
Dow Jones Composite Average - Tracks the stock performance of the 65 stocks which comprise the three averages listed above.
GOOD MONEY Industrial Average - The "Good Dow" tracks 30 industrial stocks whose companies are screened for social and environmental factors. Designed to track against the Dow Jones Industrial Average.
GOOD MONEY Utility Average - Tracks the stock performance of 15 gas, electric, and power companies that are screened for no nuclear power and good environmental records. Designed to track against the Dow Jones Industrial Average.
International Indexes ---
CAC 40; Paris, France
DAX 30; Frankfurt, Germany
FT-SE 100; London, England
Hang Seng; Hong Kong, China
Nikkei 225; Tokyo, Japan
Lehman Brothers Treasury Bond Index - An index of prices of long-term treasury bonds.
Nasdaq Composite Index - A composite index of more than 3000 companies listed on the Nasdaq (also referred to as over-the-counter or OTC stocks).
New York Stock Exchange Composite Index - A composite index of shares listed on the NYSE.
Russell 2000 Index - A market capitalization weighted index published by Frank Russell of Tacoma, Washington. The Russell 2000 is one of the most widely regarded measures of the stock price performance of small companies. It is a part of the Russell 3000 Index that consists of the 3000 largest U.S. stocks in terms of market capitalization. The highest-ranking 1000 stocks are in the Russell 1000 Index (which closely mirrors the S&P 500 Index). The remaining 2000 stocks, the Russell 2000 Index, represent approximately 11% of the Russell 3000 Index's total market capitalization.
S&P (Standard & Poor's) 500 Index - A weighted index based on the average performance of 500 widely held stocks including industrial, transportation, financial, and utility stocks.
Value Line Composite Index - An equal-weighted index which averages the price change from the previous day's close in each of the index's approximately 1700 component stocks. Smaller, more volatile stocks have the same impact on the index value as large-cap less volatile stocks, therefore, the index is more sensitive to economic changes than a broad-based index.
Wilshire 5000 Index - A "total market" index that attempts to track the direction of most of the widely-traded shares on U.S. exchanges including small-, mid-, and large-cap issues. Junk Bonds - Bonds that Moody's and Standard & Poors rate "BB" or below because they believe that the issuer's ability to pay is very low. Also see: Risk.
Leveraging - Magnifying rates of return by investing with borrowed funds.
Margin - The amount of an investor's deposit expressed as a percentage of the market value of the investment.
Net Asset Value - For a fund, total assets less total liabilities divided by the number of shares outstanding.
Participating Shares -- See Preferred Stock
Revolving Loan Fund - A fund granting "open-end" credit that can be used at the borrower's discretion up to a prescribed limit.
1. Call Risk - The risk that a bond issue will pay off its high yielding debt before the maturity date.
2. Credit Risk - The risk that a bond issuer will be unable to make scheduled payments of principal and interest.
3. Currency Risk - The risk that an investment in a foreign issue will not perform well as a result of a decline in the foreign currency.
4. Interest Rate Risk - The risk that there will be a decline in the principal value of a bond as a result of rising interest rates.
5. Market Risk - The risk that the entire stock market will decline thereby effecting the value of a stock or stock fund.
6. Reinvestment Risk - The risk that interest rates will fall and that money will have to be reinvested at lower rates.
7. Sector Risk - The risk that stocks of particular industries or countries will decline.
8. Security Risk - The risk that a particular company will not perform well and the price of its stock will decline.Viatical Settlement - The sale or transfer for value of a life insurance contract and/or its death benefit by a terminally ill person to a third party investor at a discount from the face value of the policy, allowing the terminally ill person to convert their policy to cash while they are still living and when the funds may be needed most.
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Revised February 1, 2007.