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Lehman Aggregate Bond Index
This index is composed of U.S. government and corporate bonds,
as well as mortgage-backed securities. It is considered the most
reflective of the total bond market.
Lehman Government Bond Index
This index is composed of U.S. Treasury and agency bonds. It
is reflective of these two sectors of the bond market.
Lehman Intermediate Government/Corporate
This index is composed of U.S. government and corporate bonds.
It is reflective of these two sectors of the bond market.
Lehman 7 Year Municipal Bond Index
This index tracks municipal bonds with at least a BAA credit
rating and with maturities ranging between six and eight years.
Lehman Mutual Fund PA or NJ Index
These indices track state specific municipal bonds.
Life expectancy is the number of years you are expected to live based on your current age.
Lipper Growth Index
This index tracks mutual funds which normally invest in companies
whose long-term earnings are expected to grow significantly faster
than the earnings of the stocks represented in the major unmanaged
How quickly an investment can be turned into cash.
A sales charge or commission assessed by certain mutual funds
("load funds") to cover their selling costs. Mutual
funds sold through a broker or salesperson are usually "loaded
The amount a mutual fund pays to its investment adviser for its
services to the fund.
The current market price per share of a company
multiplied by the number of shares outstanding.
The current market price of a security, derived by the number
of a companys stock shares outstanding multiplied by the
price per share.
The date on which a bond issuer is obligated to repay the amount
borrowed to the lender, or investor.
Merrill Lynch 1-year Treasury Index
This index represents the total rate of return of one-year Treasury
bills based on daily closing prices.
Merrill Lynch 1-3 Year Treasury Index
This index represents the total rate of return of Treasury bills
with a maturity of one to three years based on daily closing prices.
Merrill Lynch 1-3 Year Corporate Index
This index consists of fixed-rate, coupon bearing corporate bonds,
with a maturity of one to three years, and a rating of BBB/Baa3
The smallest amount needed to open a new account or to make additional
investments in a mutual fund.
Money Market Funds
Mutual funds that invest in short-term securities, such as U.S.
Treasury bills, certificates of deposit from large banks, and
commercial paper. These funds seek to maintain stability of principal
and a constant value of $1 per share. The yield for money market
funds changes according to market conditions and interest rates.
Money market funds are neither insured nor guaranteed by the U.S.
Government, and there is no assurance that they will be able to
maintain a net asset value of $1.00. Many funds also offer check
Morgan Stanley MSCI EAFE Index
This index is an arithmetic, market value-weighted average of
the performance of over 900 securities listed on the stock exchanges
of countries in Europe, Australia, and the Far East. The index
is calculated on a total return basis, which includes reinvestment
of net dividends before the deduction of withholding taxes.
A debt obligation issued by a city, state or municipality. Interest
from these bonds is generally exempt from federal income tax.
A mutual fund is an investment that allows you to pool your money with other investors for the purpose of investing in stocks, bonds and other securities. Most mutual fund portfolios are professionally managed.
Net Asset Value (NAV) Per Share
The redemption price of one share of a fund. This figure is calculated
by dividing the total value of all the individual securities in
a fund, minus expenses, by the total number of shares outstanding.
The NAV usually changes from day to day.
Letter requested from the Securities and Exchange Commission.
In this letter, the Commission agrees not to either take civil
or criminal action with respect to the specific activity and circumstances.
A mutual fund that sells its shares at net asset value, without
charging a sales commission, or load.
Under certain circumstances, you may make a contribution to a traditional IRA that is not able to be deducted from your federal income tax.
Definition to come.
The purchase price per share of a mutual fund, determined by
adding any applicable sales charge to the fund's net asset value
(NAV) per share. Also known as ask price or public offer price.
Penalty Free Withdrawal
Under certain circumstances, early withdrawals from IRAs are exempt from the 10% early withdrawal penalty tax. These exemptions may include purchasing a first home, qualified educational expenses, qualifying medical expenses, health insurance premiums while unemployed, payment made over your life expectancy, disability or payments to your beneficiary.
All the securities that are held by a mutual fund, or a term
for describing all the investments you own: stocks, bonds, mutual
funds, etc. A diversified portfolio contains a variety of investments.
Holding a variety of securities in a portfolio to reduce risk.
The individual who is responsible for managing a mutual fund's
When you take a distribution from your IRA (traditional or Roth) before you are 59½, there is usually a 10% early withdrawal penalty tax. See penalty free withdrawal.
Principal, or Par Value
The face value of a bond. Also the amount on which interest payments
An explanatory booklet distributed by the issuer of a security
or mutual fund, in compliance with SEC regulations. A mutual fund
prospectus must include the funds investment objective,
expenses and fees, including management and sales fees, a description
of shareholder services offered, and information on how to buy
The document forwarded to shareholders of a mutual fund requesting
that they vote on certain key issues at the fund's annual meeting.
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