Investor Education

A mutual fund that stresses higher than average current income distributions.

Personal, tax deferred retirement account that an employed individual can contribute to annually.

A persistent upward movement in the general price level of goods and services that result in a decline in the purchasing power of money.

A fund that invests in securities with an average duration of greater than or equal to 3.5 years, but less than or equal to 6 years, or an average effective maturity of 4 but less than 10 years.

Stocks of companies that are located outside of the United States .

A person in the business of rendering advice or analysis regarding securities for compensation. Persons meeting this definition must register with the SEC and/or individual states depending upon the amount of assets under management and the states in which they are operating. The term does NOT include attorneys and accountants giving advice as an incidental part of their professional practice. (See "Advisor.")

A broker/dealer organization that provides a service to an industry through counseling, and underwriting of securities.

An institution engaged primarily in the business of investing and trading in securities for others including face amount certificate companies, unit trust companies and management companies, both open- and closed-end.

The broad credit designation given to bonds that have a high probability of being paid and minor, if any, speculative features. Bonds rated BBB or higher by Standard and Poor's Corporation or Baa or higher by Moody's Investors Service, Inc., are deemed by those agencies to be "investment grade." *

Gross - Total amount of dividends, interest, etc. received from an investment company's investments before deduction of any expenses.

Net - Balance of gross income after payment of operating expenses, including management fees, legal and accounting costs, etc. If at least 90% is distributed to shareholders, tax is paid on the undistributed income only.

The organization which is responsible for the management of the investment company, under contract. Its services usually include general administrative activities and advice and recommendations as to the purchase, holding, or sale of portfolio securities. (See "Advisor.")

An Initial Public Offering (IPO) denotes the first time that a company's stock is issued for sale to the public. The company converts from private ownership to public ownership.

Individual Retirement Accounts (IRAs) were created by Congress in 1974 as a way of encouraging people to save towards their retirement. All employed individuals may open and contribute to an IRA. Contributions to an IRA may be tax deductible, depending on your income level and your participation in an employer-sponsored plan.

Effective January 1, 1998, Education IRAs may be established for the purpose of paying qualified higher education expenses for the designated beneficiary of the Education IRA. Although contributions to Education IRAs are not tax deductible, the distributions are tax-free as long as the distributions are taken to pay for qualified educational expenses. The maximum contribution is $500 per beneficiary each year.

Effective January 1, 1998, the ROTH IRA became available. Contributions are non-deductible and distributions taken for certain qualifying purposes are tax-free.

Any of a company's class of securities, or the act of distributing them.

A corporation, municipality, state, trust, or association engaged in the distribution of its securities.