# of Up Periods

# Of Up Periods / Down Periods: Indicates the number of quarters the portfolio has generated a positive / negative return over the given time period.

AAA Rating

An AAA rating is the highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has an exceptional degree of creditworthiness and can easily meet its financial commitments. Ratings agencies such as Standard & Poor’s and Fitch Ratings use AAA to indicate the highest credit quality, while Moody’s uses Aaa.

AA+ Rating

An AA+ rating is generally one step below the highest rating (AAA) assigned to the bonds of an issuer by credit rating agencies. This rating signifies that there is little to no risk of default and is often assigned to securities that have some type of insurance backing.

Absolute return

The return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage) that an asset – usually a stock or a mutual fund – achieves over a given period of time. Absolute return differs from relative return because it is concerned with the return of a particular asset and does not compare it to any other measure or benchmark.

Active Management

Investment managers attempt to outperform the market by predicting market activity, and can add value to portfolios by anticipating market cycles and continuously changing asset allocation over time.

ADP National Employement Report

The ADP National Employment Report®, sponsored by ADP®, was developed and is maintained by Macroeconomic Advisers, LLC. It is a measure of employment derived from an anonymous subset of roughly 500,000 U.S. business clients. During the twelve-month period through December 2009, this subset averaged over 360,000 U.S. business clients and over 22 million U.S. employees working in all private industrial sectors.

ADP Private Jobs Report

The ADP National Employment Report (ADP Private Jobs Report) provides a monthly snapshot of U.S. nonfarm private sector employment based on actual transactional payroll data. The report is based on payroll data from over half of ADP’s U.S. business clients, which represents about 24 million employees from all 19 of the major North American Industrial Classification (NAICS) private industrial sectors.

Advance/Decline Line

The advance/decline line (A/D) is a technical indicator that plots changes in the value of the advance-decline index over a certain time period. Each point on the chart is calculated by taking the difference between the number of advancing/declining issues and adding the result to the previous period’s value.

Affordable Care Act (ACA)

Also known as Obamacare, it’s a federal statute signed into law in 2010 that seeks to expand Medicaid eligibility, establish health insurance exchanges, and prohibit insures from denying coverage due to pre-existing conditions.

Alerian MLP Index

The Alerian MLP Index is a composite of the 50 most prominent energy Master Limited Partnerships that provides investors with an unbiased, comprehensive benchmark for this emerging asset class. The index, which is calculated using a float-adjusted, capitalization-weighted methodology, is disseminated in real time on a price-return basis (NYSE: AMZ) and on a total-return basis (NYSE: AMZX).


Alpha: Measures the difference between a portfolio’s actual returns and its expected performance, given its level of risk as measured by Beta. A positive (negative) Alpha indicates the portfolio has performed better (worse) than its Beta would predict.

American Association of Individual Investors (AAII)

The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.

American Petroleum Institute (API)

Trade association representing the U.S. oil and gas industry.


An Annuity is a financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years.


Regional institution that provides capital to emerging market economies with the goal of promoting economic development in the Asia-Pacific region.

Asian Development Bank (ADB)

The Asia-Pacific Economic Cooperation (APEC) is a regional economic forum established in 1989 to help foster trade and cooperation in the Asia-Pacific region.

Asset-Backed Securities

Asset-backed securities are bonds or notes backed by financial assets such as non-mortgage loans including credit card receivables, auto loans, manufactured-housing contracts, and home-equity loans.

Asset Class

An Asset Class is a group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed-income (bonds) and cash equivalents (money market instruments).


The ASX is the Australian Stock Exchange located in Sydney, Australia.

Average Duration

Average Duration: A common gauge of the price sensitivity of a fixed income asset or portfolio to a change in interest rates

Average Up Period

Average Up / Down Return:  Measures the average return generated during quarters that the portfolio had a positive /negative return.

BAA Spread

The BAA spread refers to the yield on corporate bonds above the rate on comparable maturity Treasury debt, and is a market-based estimate of the amount of fear in the bond market. BAA-rated bonds are the lowest quality bonds still considered investment-grade, rather than high-yield. Therefore, they best reflect the stresses across the quality spectrum. A rise in BAA spreads acts as a negative for the CCI.

Baker Hughes Weekly Rig Count

Baker Hughes releases its North American Rig Count report weekly. This publication reports the number of drills actively exploring for or developing oil or natural gas wells in the United States and Canada.

Balanced Portfolio

Balanced portfolio is a method of portfolio allocation designed to provide both income and capital appreciation while avoiding excessive risk.

Bank of America Merrill Lynch Global Fund Managers Survey

The Merrill Lynch Global Fund Managers Survey that surveys roughly 200 panelists with a total of approximately $600 billion in assets under management about market outlooks and broad portfolio positioning.

Bank of England (BOE)

The Bank of England (BOE) is the central bank of the United Kingdom; the BOE’s roles include overseeing monetary policy and issuing currency.

Bank Loans

Bank Loan portfolios primarily invest in floating-rate bank loans instead of bonds. In exchange for their credit risk, these loans offer high interest payments that typically float above a common short-term benchmark such as the London Interbank Offered Rate, or LIBOR.

Bloomberg Barclay’s Aggregate Bond Index

The Bloomberg Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities.

Bloomberg BVAL AAA Muni Yield % of Treasury Index

The BVAL Municipal AAA Benchmark captures credit spreads and is validated by AAA competitive and negotiated new issues.

Bloomberg Barclay’s Global Aggregate Bond Index

The Bloomberg Barclays Global Aggregate Index measures the performance of global investment grade debt. The index includes treasury, corporate, and securitized fixed-rate bonds.

Bloomberg Barclay’s U.S. Corporate Index

The Bloomberg Barclays U.S. Corporate Index is a broad-based benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate, taxable corporate bond market.

Bloomberg Barclay’s High-Yield Bond Index

The Bloomberg Barclays High-Yield Bond Index is an unmanaged index of corporate bonds rated below investment grade by Moody’s, S&P or Fitch Investor Service. The index also includes bonds not rated by the ratings agencies.

Bloomberg Barclay’s Municipal Bond Index

The Bloomberg Barclays Municipal Bond Index is a market capitalization-weighted index of investment-grade municipal bonds with maturities of at least one year. All indices are unmanaged and include reinvested dividends. One cannot invest directly in an index. Past performance is no guarantee of future results.

Bloomberg Barclay’s Long Government Index

The Bloomberg Barclays Long-Term Government/Corporate Bond Index is an unmanaged index that includes fixed-rate debt issues rated investment grade or higher by Moody’s Investors Services, Standard & Poor’s Corporation, or Fitch Investor’s Service, in order. Long-term indexes include bonds with maturities of 10 years or longer. Investors cannot invest directly in this index.

Bloomberg Barclay’s U.S. TIPS Index

The index includes all publicly issued, U.S. Treasury inflation-protected securities that have at least one year remaining to maturity.

Bloomberg Barclay’s U.S. Treasury Index

The index includes public debt of the U.S. Treasury with a remaining maturity of one year or more.

Bloomberg Barclay’s U.S. MBS Index

This index measures the performance of investment grade mortgage-backed securities of FNMA, GNMA, and FHLMC.

Bloomberg Barclay’s U.S. High Yield Loans Index

The U.S. High-Yield Loans index provides broad total return metrics of syndicated term loans.

Bloomberg Barclay’s USD EMD Aggregate Index

The Bloomberg Barclays Emerging Markets USD Aggregate Index is a flagship hard currency emerging market (EM) debt benchmark that includes fixed and floating-rate U.S. dollar–denominated debt issued from sovereign, quasi-sovereign, and corporate EM issuers. Country eligibility and classification as emerging markets is rules-based and reviewed annually using World Bank income group and International Monetary Fund (IMF) country classifications.

Bloomberg probability index (WIRP)

The Bloomberg probability index seeks to measure the odds of future events using market price data.

Bloomberg Barclay’s High Yield Municipal Index

The Bloomberg Barclay’s High Yield Municipal Bond Index tracks consists of below-investment grade municipal bonds.

Basel III

Basel III is a comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements.

Basis Points
Basis Points are a unit relating to interest rates that is equal to 1/100th of a percentage point. It is frequently but not exclusively used to express differences in interest rates of less than 1%.

Batting Average

Batting Average is a statistical measure used to measure an investment manager’s ability to meet or beat an index. Batting average is calculated by dividing the number of days (or months, quarters, etc.) in which the manager beats or matches the index by the total number of days (or months, quarters, etc.) in the period of question and multiplying that factor by 100.

BBB Rating

An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

Bear Market

A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining.

Beige Book

The Beige Book is a commonly used name for the Fed report called the Summary of Commentary on Current Economic Conditions by Federal Reserve District. It is published just before the FOMC meeting on interest rates and is used to inform the members on changes in the economy since the last meeting.

Best Quarter

Best Quarter / Worst Quarter Return: Indicates the highest / lowest quarterly rate of return generated by the portfolio.


Beta measures a portfolio’s volatility relative to its benchmark. A Beta greater than 1 suggests the portfolio has historically been more volatile than its benchmark. A Beta less than 1 suggests the portfolio has historically been less volatile than its benchmark.

Bloomberg Dollar Spot Index

The Bloomberg Dollar Spot Index (BBDXY) tracks the performance of a basket of 10 leading global currencies versus the U.S. Dollar.

Bond Buyer 30-Day Visible Supply Calendar

The Bond Buyer 30-Day Visible Supply Calendar reflects the volume of bonds in dollars expected to reach the market within the next 30 days.

Brady Bond

Restructured debt backed by Treasuries and issued by emerging market countries after defaulting on original loans.


A technical analysis technique that looks to gauge the direction of the market by comparing the number of companies advancing relative to the number of companies declining. Market breadth is positive when more companies are moving higher.

Breakeven yield

Breakeven yield is the point at which the money brought in from the sale of a product or service is equal to the cost of marketing the product or services. The breakeven point is the point at which no profit or loss is being derived. Breakeven yield allows a decision-maker to have knowledge about the minimum volume yield required to earn a specific rate of return on a product or service.


Term used to describe the potential exit of Britain from the European Union.


Bubble describes an economic cycle characterized by rapid expansion followed by a contraction.

Build America Bonds

The issuance of Build America Bonds (BAB) began in April of 2009. They were authorized by the ARRA economic stimulus of 2009 and can be issued for qualifying infrastructure projects. They are taxable municipal bonds and are considered a category of bonds.

Bull/Bear Survey

Measures investors’ market sentiment as bullish (optimistic), bearish (pessimistic), or neutral.

Business Cycle

The Business Cycle is recurring and fluctuating levels of economic activity that an economy experiences over a long period of time. The five stages of the business cycle are growth (expansion), peak, recession (contraction), trough and recovery. At one time, business cycles were thought to be extremely regular, with predictable durations, but today they are widely believed to be irregular, varying in frequency, magnitude and duration.

Business inventories

Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity.

The Business Roundtable CEO Economic Outlook Index

A report based on a survey of the forward-looking economic views of Business Roundtable member CEOs.


The Cotation Assistée en Continu, or CAC, is a benchmark for the French stock market, and one of the main national indices of the pan-European stock exchange group, Euronext.

CAC 40

The CAC 40 is a capitalization-weighted index of the 40 largest French equities designed to measure the overall performance of the Paris Bourse, the French stock exchange.

Case-Shiller Home Price Index

Tracks repeat sales home prices for the United States.

Caixin China PMI

Leading indicator of Chinese manufacturing activity.

CBOE Skew Index

The CBOE Skew Index measures the perceived tail risk of the S&P 500 Index.


The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise by the Federal Reserve to assess whether the largest bank holding companies operating in the United States have sufficient capital to continue operations throughout times of economic and financial stress and that they have robust, forward-looking capital-planning processes that account for their unique risks.


An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

Challenger, Gray & Christmas

Challenger, Gray & Christmas is the oldest executive outplacement firm in the United States. The firm conducts regular surveys and issues reports on the state of the economy, employment, job-seeking, layoffs, and executive compensation.

Chicago Fed National Activity Index

The Chicago Fed National Activity Index (CFNAI) is a monthly index designed to gauge overall economic activity and related inflationary pressure.

Chicago Purchasing Managers’ Index (CFMMI)

The Chicago Area Purchasing Manager Index that is read on a monthly basis to gauge how manufacturing activity is performing. This index is a true snapshot of how manufacturing and corresponding businesses are performing for a given month. A reading of 50 or above is considered a positive reading. Anything below 50 is considered to indicate a decline in activity. Readings of the index have the ability to shift the day’s trading session one way or another based on the results.

Chicago Fed Midwest Manufacturing Index (CFMMI)

The Chicago Fed Midwest Manufacturing Index (CFMMI) is a monthly estimate by major industry of manufacturing output in the Seventh Federal Reserve District states of lllinois, Indiana, Iowa, Michigan and Wisconsin. It is a composite index of 15 manufacturing industries that uses hours worked data to measure monthly changes in regional activity.

China M2

China’s A-Share Market

China’s A-share market: Composed of companies located in China that are listed on Chinese mainland stock exchanges.

Citigroup Economic Surprise Index (CESI)

The Citigroup Economic Surprise Index (CESI) measures the variation in the gap between the expectations and the real economic data.


Contingent Convertibles: A bond that is convertible to shares of common stock at a predetermined price; however, there is also a second, higher stock price level that must be reached before the conversion can be executed.


COMEX is the primary market for trading metals, such as gold.

Commercial Paper

A short-term unsecured promissory note issued by a finance company or a relatively large industrial firm. The notes are generally sold at a discount from face value with maturities ranging from 30 to 270 days. Although the large denominations ($25,000 minimum) of these notes usually keep individual investors out of this market, the notes are popular investments for money market mutual funds. Used interchangeably with the term paper.


A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers.

Commodity Futures Trading Commission (CFTC)

The U.S. Commodity Futures Trading Commission is an agency of the U.S. government that regulates the commodity futures and options markets.

Congressional Budget Office

The Congressional Budget Office is a non-partisan arm of Congress, established in 1974, to provide Congress with non-partisan scoring of budget proposals.

Consumer Confidence Index

The Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. Three thousand households across the country are surveyed each month. In general, while the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month.

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Consumer Price Inflation

Consumer Price Inflations is the retail price increase as measured by a consumer price index (CPI).

Consumer Sentiment Report

The Consumer Sentiment report refers to a report published by the University of Michigan, in which the University’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is important because it is directly related to the strength of consumer spending. Preliminary estimates for a month are released at mid-month. Final estimates for a month are released near the end of the month.

Core CPI

Core CPI is a subset of the total Consumer Price Index (CPI) that excludes the highly volatile food and energy prices. It is released by the Bureau of Labor Statistics around the middle of each month. Compare to Personal Consumption Expenditures (PCE); Core PPI; Producer Price Index (PPI).

Core Inflation

Core Inflation is a measure of inflation that excludes certain items that face volatile price movements. Core inflation eliminates products that can have temporary price shocks because these shocks can diverge from the overall trend of inflation and give a false measure of inflation.


Correlation is a statistical measure of how two securities move in relation to each other. Correlations are used in advanced portfolio management.

Credit Default Swap (CDS)

A Credit Default Swap (CDS) is designed to transfer the credit exposure of fixed income products between parties. The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. By doing this, the risk of default is transferred from the holder of the fixed income security to the seller of the swap.

Credit Quality

Credit Quality is one of the principal criteria for judging the investment quality of a bond or bond mutual fund. As the term implies, credit quality informs investors of a bond or bond portfolio’s credit worthiness, or risk of default.

Credit Rating

Credit ratings are published rankings based on detailed financial analyses by a credit bureau specifically as it relates the bond issue’s ability to meet debt obligations. The highest rating is AAA, and the lowest is D. Securities with credit ratings of BBB and above are considered investment grade.

Credit Risk

Credit risk is the risk of loss of principal or loss of a financial reward stemming from a borrower’s failure to repay a loan or otherwise meet a contractual obligation. Credit risk arises whenever a borrower is expecting to use future cash flows to pay a current debt. Investors are compensated for assuming credit risk by way of interest payments from the borrower or issuer of a debt obligation. Credit risk is closely tied to the potential return of an investment, the most notable being that the yields on bonds correlate strongly to their perceived credit risk.

Credit Spread

The credit spread is the yield the corporate bonds less the yield on comparable maturity Treasury debt. This is a market-based estimate of the amount of fear in the bond market Bass-rated bonds are the lowest quality bonds that are considered investment-grade, rather than high-yield. They best reflect the stresses across the quality spectrum.

Currency forward

Currency Forward is a forward contract in the forex market that locks in the price at which an entity can buy or sell a currency on a future date. Also known as “outright forward currency transaction”, “forward outright” or “FX forward”.

Current Conditions Index (CCI)

The Current Conditions Index (CCI) is a weekly measure of the conditions that underpin LPL Financial Research’s outlook for the markets and economy. It provides real-time insight into the trends that shape our recommended actions to manage portfolios and has proven to be a useful investment decision-making tool. This index is not intended to be a leading index or predict future conditions; it is a coincident measure of where they are now. Because our index is tailored to the current environment, the components of the CCI are periodically changed to retune the index to those factors most critical to the markets and economy, so it may continue to be a valuable investment decision-making tool.

Current account

Current account is the difference between a nation’s savings and its investment.

Dallas Fed Manufacturing Index

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Firms are asked whether output, employment, orders, prices, and other indicators increased, decreased, or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator.


The Deutscher Aktien Index (DAX) is a stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange.

Debt ceiling

The debt ceiling refers to the maximum amount of money the United States Federal Government can borrow, and is set by law (created under the Second Liberty Bond Act of 1917).


Debt-to-GDP is a measure of a country’s federal debt in relation to its gross domestic product (GDP). By comparing what a country owes and what it produces, the debt-to-GDP ratio indicates the country’s ability to pay back its debt. The ratio is a coverage ratio on a national level.

Default Rate

Default Rate is the interest rate charged to a borrower when payments on a revolving line of credit are overdue. This higher rate is applied to outstanding balances in arrears in addition to the regular interest charges for the debt.

Default rate

Default rate is the rate in which debt holders default on the amount of money that they owe. It is often used by credit card companies when setting interest rates, but also refers to the rate at which corporations default on their loans. Default rates tend to rise during economic downturns, since investors and businesses see a decline in income and sales while still required to pay off the same amount of debt.

Default Risk

Default Risk is when companies or individuals will be unable to make the required payments on their debt obligations. Lenders and investors are exposed to default risk in virtually all forms of credit extensions. To mitigate the impact of default risk, lenders often charge rates of return that correspond the debtor’s level of default risk. The higher the risk, the higher the required return, and vice versa.


Deflation is a general decline in prices, often caused by a reduction in the supply of money or credit.


A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.


Dow Jones Industrial Average is the most widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials. The 30 stocks are chosen by the editors of the Wall Street Journal. The Dow is computed using a price-weighted indexing system, rather than the more common market cap-weighted indexing system.

Dollar Index

A measure of the value of the U.S. dollar relative to majority of its most significant trading partners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.

Dow Jones Industrial Average Index

The Dow Jones Industrial Average Index is comprised of U.S.-listed stocks of companies that produce other (non-transportation and non-utility) goods and services. The Dow Jones Industrial Averages are maintained by editors of The Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the market sectors covered by the average. The Dow Jones averages are unique in that they are price weighted; therefore their component weightings are affected only by changes in the stocks’ prices.

Dow Jones Transportation Average Index

The Dow Jones Transportation Average is a price-weighted index that covers twenty companies in the transportation industry.

Dow Jones Utility Average Index

The Dow Jones Utility Average is a price-weighted index that covers fifteen prominent companies in the utilities industry.

Dow Theory

The Dow Theory is an approach to technical analysis that was developed by Charles H. Dow.

Discount Rate

The discount rate: The rate at which member banks may borrow short term funds directly from a Federal Reserve Bank. The discount rate is one of the two interest rates set by the Fed, the other being the Federal funds rate. The Fed actually controls this rate directly, but this fact does not really help in policy implementation, since banks can also find such funds elsewhere.

Dot Plots

A chart showing the economic projections of Federal Reserve board members and Federal Reserve Bank presidents which includes forecasts for: inflation, unemployment, gross domestic product, and Fed funds rates.

DuPont Analysis

The DuPont method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE). It is also known as “DuPont identity”.

Durable Goods Orders

Durable goods orders refer to an economic indicator released monthly by the Bureau of Census that reflects new orders placed with domestic manufacturers for delivery of factory hard goods (durable goods) in the near term or future. Durable goods orders come in two releases per month: the advance report on durable goods and the manufacturers’ shipments, inventories and orders.


Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. It is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices. The bigger the duration number, the greater the interest-rate risk or reward for bond prices.

Earnings Before Interest, Taxes, Depreciation and Amortization – EBITDA

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is essentially net income with interest, taxes, depreciation, and amortization added back to it, and can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions.

Economic Cycle

The natural fluctuation of the economy between periods of expansion (growth) and contraction (recession).

Economy Watchers Survey

A report that contains data used to determine regional economic trends in the Japanese economy.

European Central Bank (ECB)

The European Central Bank (ECB) is the central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed in Germany in June 1998 and works with the other national banks of each of the EU members to formulate monetary policy for the European Union.

European Stabilization Mechanism (ESM)

International organization that serves as a firewall for the Eurozone to provide liquidity to member countries. It has a maximum lending capacity of €500 billion.


Eurodollars are U.S. dollar denominated time deposits held at foreign banks. Given that they are held outside the country, they are not under the jurisdiction of the Federal Reserve.

Emerging Market

An emerging market is a nation that is progressing toward becoming advanced, as shown by some liquidity in local debt and equity markets and the existence of some form of market exchange and regulatory body.

Emerging Market Debt (EMD)

Emerging market debt (EMD) is a term used to describe bonds issued by less developed countries. This type of debt is primarily issued by sovereign (government) issuers, and may be denominated in local currencies, or more heavily used currencies such as the Dollar or Euro.

Empire State Manufacturing Index

The Empire State Manufacturing Index is a seasonally adjusted index that tracks the results of the Empire State Manufacturing Survey. The survey is distributed to roughly 175 manufacturing executives and asks questions intended to gauge both the current sentiment of the executives and their six-month outlook on the sector.

Empire State Manufacturing Survey

Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York.

Employment Cost Index 

The Bureau of Labor Statistics’ (BLS) Employment Cost Index (ECI) is a quarterly release which gives information on the costs of labor for businesses in the United States.

Employment Situation Report

The monthly jobs report (known as the employment situation report) is a set of labor market indicators based on two separate surveys distributed in one monthly report by the U.S. Bureau of Labor Statistics (BLS). The report includes the unemployment rate, non-farm payroll employment, the average number of hours per week worked in the non-farm sector, and the average basic hourly rate for major industries.

Energy Information Administration

US government agency responsible for data collection, analysis and forecasting of energy-related statistics in support of efficient markets, sound policymaking and transparency.


Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.

Equity Sensitivity

Equity Sensitivity: As investors move further down in the capital structure, equity sensitivity begins to play a larger role. When investors look for less yield and more total return (capital appreciation) in certain asset classes, the equity sensitivity also plays an increasing role in absolute risk. Investments such as convertible bonds, preferred stocks, and dividend-paying stocks have higher correlation to the equity markets and are more subject to equity sensitivity than fixed income investments such as U.S. Treasuries.

Euro Interbank Offer Rate (EURIBOR)

The rate of interest at which prime banks borrow funds from other prime banks in the European Union (EU) interbank market.

Group of seventeen European countries that have adopted the Euro as their currency.

Euro STOXX 50 Index

The EURO STOXX 50 Index is a blue-chip index for the Eurozone, which covers 50 stocks from 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

EuroStoxx 600 Banks

The EuroStoxx 600 Banks is a subset of the EuroStoxx 600 Index of banking stocks, there are 47 constituents in this index.

Excess Returns

Excess Returns are the returns in excess of the risk-free rate or in excess of a market measure, such as an index fund.

Existing Home Sales

Existing home sales is a measure of the number and price of sales of single family homes other than new construction.


Financial research firm that provides data and software services used by investment professionals.

FANG Stocks

FAANG is the acronym for five technology stocks: Facebook, Apple, Amazon, Netflix, and Google (now Alphabet, Inc.).

Federal Reserve (Fed)

The central bank of the United States and the most powerful financial institution in the world. The Federal Reserve Bank was founded by the U.S. Congress in 1913 to provide the nation with a safe, flexible and stable monetary and financial system. It is based on a federal system that comprises a central governmental agency (the Board of Governors) in Washington, DC and 12 regional Federal Reserve Banks that are each responsible for a specific geographic area of the U.S. The Federal Reserve Bank is considered to be independent because its decisions do not have to be ratified by the President or any other government official. However, it is still subject to Congressional oversight and must work within the framework of the government’s economic and financial policy objectives. Often known simply as “the Fed”.

Fed Funds Futures

Fed Funds Futures are a product offered by the Chicago Board of Trade which allow investors to speculate on what the Federal Reserve will do with interest rates.

Fed Funds Futures Curve

The Fed funds futures curve graphically represents the anticipated Fed funds rate at future points in time.

Fed Funds Rate

The Fed funds rate is the interest rate on loans by the Fed to banks to meet reserve requirements.

Fed’s “Dot Plot”

Predictions of the fed funds rate by Federal Open Market Committee (FOMC) participants plotted in a chart.

FHFA House Price Index

A broad measure of the movement of single-family house prices in the U.S.

Fiscal Policy

The means by which a government influences economic growth through spending and taxation.


An international credit rating agency based out of New York City and London. The company’s ratings are used as a guide to investors as to which investments are most likely going to yield a return.

Flattening Yield Curve

The yield curve is considered to be flattening when shorter-term rates rise more quickly than longer-term rates (or fall more slowly) of a similar credit quality, and is often perceived as an indication that slower economic growth lies ahead.

Floating Rate Auction

A floating rate auction is the same as a treasury auction except that the interest payments are tied to 3-month treasury bills.

floating rate bank loan

Floating rate bank loans are loans issued by below investment grade companies for short term funding purposes with higher yield than short-term debt and involve risk.


The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy. The eleven-person FOMC is composed of the seven-member board of governors, and the five Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other regional Federal Reserve Banks rotate their service in one-year terms.

Forward Guidance

Forward guidance is a tool used by a central bank to exercise its power in monetary policy in order to influence, with their own forecasts, market expectations of future levels of interest rates.

Forward P/E

Forward Price To Earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there is still benefit in estimated P/E analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.

Free Cash Flow

Free cash flow (FCF) measure of financial performance calculated as operating cash flow minus capital expenditures. FCF represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value. Without cash, it’s tough to develop new products, make acquisitions, pay dividends and reduce debt.

FTSE 100

The FTSE 100 is an index of blue-chip stocks on the London Stock Exchange.

FTSE 250 Index

The FTSE 250 Index is a capitalization-weighted index consisting of the 101st to the 350th largest companies listed on the London Stock Exchange. The FTSE 100 is a subset, comprised of the 100 largest companies traded on the London Stock Exchange.

FTSE Index

The Financial Times Stock Index, or FTSE, is a British provider of stock market indices and associated data services, wholly owned by the London Stock Exchange.

FTSE Milano Italia Borsa (MIB)

The FTSE MIB (Milano Italia Borsa) is the stock market index benchmark for the Borsa Italiana, the Italian national stock exchange.


The term Futures refers to future contracts, a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset) at a predetermined future date and price. Contracts detail the quality and quantity of the underlying asset, and are standardized to facilitate trading on a futures exchange. Futures are used to either hedge or speculate on the price movement of an underlying asset, such as a physical commodity or financial instrument.


A term used to refer to government bonds issued by a nation in the Group of Seven (G7). A G7 bond is considered relatively less risky than bonds issued by nations outside the G7. The G7 nations are Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. All these nations are considered industrialized and developed countries.


Generally accepted accounting principles.


The Group of Ten (G-10) is composed of eleven countries that meet annually to discuss international financial matters. The countries agreed to participate in the General Arrangements to Borrow, which is an agreement to provide the IMF with additional funds to increase its ability to lend.


The Group of Twenty (G-20) Finance Ministers and Central Bank Governors is the premier forum for our international economic development that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. By contributing to the strengthening of the international financial architecture and providing opportunities for dialogue on national policies, international co-operation, and international financial institutions, the G-20 helps to support growth and development across the globe.


Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

General Obligation Bonds

General Obligation(GO) bonds are municipal bonds backed by the credit and “taxing power” of the issuing jurisdiction rather than the revenue from a given project.

German Bund

Bond issued by Germany’s federal government. They are equivalent to the U.S.’ Treasury bonds.


Global Industry Classification Standard (GICS): A standardized classification system for equities developed jointly by Morgan Stanley Capital International (MSCI) and Standard & Poor’s. The GICS methodology is used by the MSCI indexes, which include domestic and international stocks, as well as by a large portion of the professional investment management community. The GICS hierarchy begins with 10 sectors and is followed by 24 industry groups, 67 industries and 147 sub-industries. Each stock that is classified will have a coding at all four of these levels. The 10 GIC Sectors are as follows: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Telecommunication Services, and Utilities.


A gilt is a bond issued by the British government, considered the U.K. equivalent of U.S. Treasuries. Generally regarded as low-risk investments.

Global Macro Strategy

Global Macro Strategy is a hedge fund strategy that bases its holdings–such as long and short positions in various equity, fixed income, currency, and futures markets–primarily on overall economic and political views of various countries (macroeconomic principles).

Government Employment vs Private Employment

Private employment includes persons employed at nonfarm establishments outside federal, state and local government. Government or public sector employment includes employees at Federal, state and local governments.

Gross Expense Ratio

The gross expense ratio is the fund’s total annual operating expense ratio. It is gross of any fee waivers or expense reimbursements.

Gross Value Added

A measure of economic output similar to gross domestic product (GDP) which includes all taxes received and excludes subsidies on products.

Guaranteed Lifetime Withdrawal Benefit (GLWB)

Guaranteed Lifetime Withdrawal Benefit (GLWB) is a rider on a variable annuity that allows minimum withdrawals from the invested amount without having to annuitize the investment. The amount that can be withdrawn is based on a percentage of the total amount invested in the annuity.

Hang Seng index

The Hang Seng index is a market capitalization weighted index which tracks daily changes of the 48 largest companies in the Hong Kong stock market.

Housing Starts

Housing starts are the number of new residential construction projects that have begun during any particular month.


The presidents of regional Federal Reserve Banks are commonly classified as hawks or doves. Hawks generally favor tighter monetary policy, with less monetary support from the Federal Reserve. Doves are the opposite, generally favoring easing of monetary policy.

High-Yield Bond

High Yield bond portfolios concentrate on lower-quality bonds, which are riskier than those of higher-quality companies. These portfolios generally offer higher yields than other types of portfolios, but they are also more vulnerable to economic and credit risk. These portfolios primarily invest in U.S. high-income debt securities where at least 65% or more of bond assets are not rated or are rated by a major agency such as Standard & Poor’s or Moody’s at the level of BB (considered speculative for taxable bonds) and below.

High-Yield spread

High-Yield spread is the yield differential between the average yield of high-yield bonds and the average yield of comparable maturity Treasury bonds.


The Índice Bursátil Español, or IBEX, is the principal benchmark of the Spanish stock market, the Bolsa de Madrid.

Industrial Production

The Federal Reserve’s monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining, and electric and gas utilities. The industrial sector, together with construction, accounts for the bulk of the variation in national output over the course of the business cycle. The industrial detail provided by these measures helps illuminate structural developments in the economy.

Information Ratio

Information Ratio: A risk-adjusted return measure that indicates the risk of the portfolio relative to the benchmark. It is the excess return divided by the Tracking Error.

Ifo Business Climate Index

The Ifo Business Climate Index is a leading economic indicator in Germany. Data is compiled from surveys sent to 7000 participants from firms in construction, manufacturing, retailing, and wholesaling, who are asked to assess their current business situation as well as their business outlook for the next six months.

Ifo Institute

The Ifo Institute is one of the leading economic research institutes in Europe and at the same time the one most often quoted in the German media.


The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Initial Jobless Claims

Initial Jobless Claims is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This number is watched closely by financial analysts because it provides insight into the direction of the economy. Higher initial claims correlate with a weakening economy.

Initial Public Offering (IPO)

An initial Public Offering (IPO) is the first sale of stock by a private company to the public.

Insured Bond

An Insured Bond is a bond with interest and principle payments insured by a third party. Insured bonds are usually found as a feature of municipal bonds; they are purchased, underwritten and repackaged by a financial guarantee company who then sells the issue to investors.

Interest Rate Risk

Interest Rate Risk is the risk that an investment’s value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve or in any other interest rate relationship. Such changes usually affect securities inversely and can be reduced by diversifying (investing in fixed-income securities with different durations) or hedging (e.g. through an interest rate swap).

International Council of Shopping Centers (ISCS)

International Council of Shopping Centers (ISCS) measured nominal same-store or comparable store sales excluding restaurant and vehicle demand.

International Energy Agency (IEA)

An international agency which provides policy advice to 28 member countries. The International Energy Agency (IEA) was founded in 1973-74 during an oil crisis in order to help ensure energy security for member nations. The agency’s primary mandate is to focus on the policies regarding the “three Es”: energy security, economic development and environmental protection.

International Monetary Fund (IMF)

International Monetary Fund (IMF) is an international organization created for the purpose of promoting global monetary and exchange stability, facilitating the expansion and balanced growth of international trade, and assisting in the establishment of a multilateral system of payments for current transactions.

Inverted Yield Curve

The yield curve is considered to be inverted when short-term interest rates are higher than long-term interest rates of a similar credit quality.

Investment Company Institute (ICI)

The Investment Company Institute (ICI) is the national association of U.S. investment companies, including mutual funds, closed-end funds, exchange-traded funds (ETFs), and unit investment trusts (UITs). Members of ICI manage total assets of $11.18 trillion and serve nearly 90 million shareholders.

Jobless Claims

Jobless Claims is the number of people who are filing or have filed to receive unemployment insurance benefits, as reported weekly by the U.S. Department of Labor. There are two categories of jobless claims – initial, which comprises people filing for the first time, and continuing, which consists of unemployed people who have been receiving unemployment benefits for a while. Jobless claims are an important leading indicator on the state of the employment situation and the health of the economy. Average weekly initial jobless claims are one of the 10 components of The Conference Board Leading Economic Index.


Job Openings and Labor Turnover Survey (JOLTS) is a survey done by the United States Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month. Respondents to the survey answer quantitative and qualitative questions about their businesses’ employment, job openings, recruitment, hires and separations. The JOLTS data is published monthly and by region and industry.

JP Morgan Emerging Market Bond Index
The JPMorgan Emerging Markets Bond Index Global (“EMBI Global”) tracks total returns for traded external debt instruments in the emerging markets, and is an expanded version of the JPMorgan EMBI+. As with the EMBI+, the EMBI Global includes U.S. dollar-denominated Brady bonds, loans, and Eurobonds with an outstanding face value of at least $500 million. It covers more of the eligible instruments than the EMBI+ by relaxing somewhat the strict EMBI+ limits on secondary market trading liquidity

The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange.

Korea Composite Stock Price Index

The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange.

Labor Market Conditions Index (LMCI)

The labor market conditions index (LMCI) assesses changes in labor market conditions. The LMCI is derived from a dynamic factor model that extracts the primary common variation from 19 labor market indicators.

Large Cap

Large cap refers to a company with a market capitalization value of more than $10 billion.

Leading Indicator

An economic indicator that changes before the economy has changed. Examples of leading indicators include production workweek, building permits, unemployment insurance claims, money supply, inventory changes, and stock prices. The Fed watches many of these indicators as it decides what to do about interest rates.

Leading Economic Index

The Leading Economic Index is a monthly publication from the Conference Board that attempts to predict future movements in the economy based on a composite of 10 economic indicators whose changes tend to precede changes in the overall economy.

Leverage Ratio

By using a combination of assets, debt, equity, and interest payments, leverage ratios are used to understand a company’s ability to meet it long-term financial obligations. The three most widely used leverage ratios are the debt ratio, debt-to-equity ratio, and interest coverage ratio. The debt ratio gives an indication of a company’s total liabilities in relation to their total assets. The higher the ratio, the more leverage the company is using and the more risk it is assuming.


London Interbank Offered Rate (Libor): An interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The Libor is fixed on a daily basis by the British Bankers’ Association. The Libor is derived from a filtered average of the world’s most creditworthy banks’ interbank deposit rates for larger loans with maturities between overnight and one full year.


A series of benchmarks comprised of mutual funds that, grouped by investment category, for the purpose of making performance comparisons.

Liquidity Risk

Liquidity risk is the risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss.

Log (logarithmic) Scale

A type of graph where the y axis is scaled so that equal distances on the graph measure the same in percentage terms, as opposed to traditional (arithmetic) scaling where equal distance represents equal distance between the chart units in absolute terms. Generally technicians prefer to utilize log scale when viewing charts going back two years or more, or where the percentage change shown is more than 20%.


The velocity of M1 is personal income divided by the M1 money supply. The M1 money supply consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler’s checks of nonbank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions.


The money supply is an economic term for the total amount of currency and other liquid assets available in an economy at a point in time. There are several ways to define this number. M1 includes physical money such as coins and currency, checking accounts (demand deposits), and Negotiable Order of Withdrawal (NOW) accounts. M2 includes all of M1, plus time-related deposits, savings deposits, and non-institutional money-market funds.

Low correlation

Low correlation means that different asset types have not performed in the same way: When returns on some asset types were declining, returns on others were gaining.


M3 is a measure of money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements, and other larger liquid assets.

Machine Tool Orders

Machine orders data (also known as machine tool order data) is a figure issued by Japan Machine Tool Builders Association (JMTBA) every month. It serves as one indicator of the Japanese economy.

Managed Futures Funds

Managed Futures funds use systematic quantitative programs to find and invest in positive and negative trends in the futures markets for financials and commodities. Historically, the benefit of managed futures have been solid long-term returns with very low correlation to equities and fixed income securities.

Margin Debt

Margin debt is debt used to purchase securities within an investment account. Margin debt carries an interest rate, and the amount of margin debt will change daily as the value of the underlying securities changes.

Market Breadth

Term used to describe the ratio of advancing securities to declining securities on a stock exchange.

Market Capitalization

A company’s market capitalization is the market value of its outstanding shares. Market capitalization is calculated by multiplying the number of a company’s shares outstanding by its stock price per share. Classifications such as large-cap, mid-cap and small-cap are only approximations and may change over time.

Master Limited Partnership (MLP)

Master Limited Partnership (MLP) is a type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP’s cash flow, whereas the general partner is the party responsible for managing the MLP’s affairs and receives compensation that is linked to the performance of the venture.

Master Limited Partnership (MLP) – Risk

Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling. MLPs are subject to significant regulation and may be adversely affected by changes in the regulatory environment including the risk that an MLP could lose its tax status as a partnership. Additional management fees and other expenses are associated with investing in MLP funds.

McClellan Oscillator

A market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. It is primarily used for short and intermediate term trading.

Merger Arbitrage

Merger Arbitrage is a hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless profit. A merger arbitrageur looks at the risk that the merger deal will not close on time, or at all. Because of this slight uncertainty, the target company’s stock will typically sell at a discount to the price that the combined company will have when the merger is closed. This discrepancy is the arbitrageur’s profit.

Merrill Lynch Option Volatility Estimate (Move) Index

A yield curve weighted index of the normalized implied volatility on 1-month Treasury options which are weighted on the 2, 5, 10, and 30 year contracts.

Merril Lynch Preferred Stock Hybrid Index

The index measures the performance of preferred stock securities.


The MICEX Index is a capitalization-weighted composite index calculated based on prices of the 50 most liquid Russian stocks.

Mid Cap

A mid-cap company is a company with a market capitalization between $2 billion and $10 billion. The prices of mid-cap stocks are generally more volatile than large cap stocks.


The tendency for market price to continue to move in the same direction as the overall trend.

Money Supply

The money supply is an economic term for the total amount of currency and other liquid assets available in an economy at a point in time. There are several ways to define this number. M1 includes physical money such as coins and currency, checking accounts (demand deposits), and Negotiable Order of Withdrawal (NOW) accounts. M2 includes all of M1, plus time-related deposits, savings deposits, and non-institutional money-market funds.

Monetary Policy

Monetary policy is the process through which the monetary authority (central bank, currency board, or other regulatory committee) of a country controls the size and rate of growth of the money supply, which in turn affects interest rates.


An independent, unaffiliated research company that rates fixed income securities. Moody’s assigns ratings on the basis of risk and the borrower’s ability to make interest payments.

Mortgage-Backed Security (MBS) – Definition

A mortgage-backed security (MBS) is a type of asset-backed security that is secured by a mortgage, or more commonly a collection (“pool”) of sometimes hundreds of mortgages. The mortgages are sold to a financial institution (a government agency or investment bank) that “securitizes”, or packages, the loans together into a security that can be sold to investors. The structure of the MBS may be known as “pass-through”, where the interest and principal payments from the borrower or homebuyer pass through it to the MBS holder, or it may be more complex, made up of a pool of other MBSs.

MSCI All Country World Index

The MSCI All Country World Index is an unmanaged, free-float-adjusted, market capitalization-weighted index composed of stocks of companies located in countries throughout the world. It is designed to measure equity market performance in global developed and emerging markets. The index includes reinvestment of dividends, net of foreign withholding taxes.

MSCI Asia Pacific Index

The MSCI Asia Pacific Index is comprised of more than 900 companies representing approximately 85% of market capitalization for 5 developed and 8 emerging markets countries in the Asia Pacific region.

MSCI China Index

The MSCI China H Index includes large-cap and mid-cap companies that are incorporated in mainland China and traded on the Hong Kong exchange.


The MSCI EAFE Index is made up of approximately 1,045 equity securities issued by companies located in 19 countries and listed on the stock exchanges of Europe, Australia, and the Far East. All values are expressed in U.S. dollars. Past performance is no guarantee of future results.

MSCI Emerging Markets Index

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to
measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt,
Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South
Africa, Taiwan, Thailand, and Turkey.

MSCI KLD 400 Social Index

The MSCI KLD 400 Social Index is a capitalization weighted index of 400 U.S. securities that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts. The parent index is MSCI USA IMI, an equity index of large, mid and small cap companies.

Municipal Bonds

A municipal bond is a debt security issued by a state, municipality, or county to finance its capital expenditures. These bonds are usually exempt from federal taxes, and may also be exempt from state and local taxes, especially if the investor lives in the state where the bond is issued.

Municipal Market Advisors

Municipal Market Advisors is an independent strategy, research and advisory firm.

Municipal-to-Treasury Yield Ratio

The Municipal-to-Treasury Yield compares the current yield of municipal bonds to US Treasuries of the same maturity. If
the ratio is at 100%, it indicates that the yield on a AAA-rated municipal bond is the same as a Treasury security of the same maturity. The ratio can be used as a gauge of price levels of municipal bonds relative to Treasuries.

Municipal Securities Rulemaking Board (MSRB)

The Municipal Securities Rulemaking Board (MSRB) writes investor protection rules and other rules regulating broker-dealers and banks in the United States municipal securities market, including tax-exempt and taxable municipal bonds, municipal notes, and other securities issued by states, cities, and counties or their agencies to help finance public projects or for other public policy purposes.

NAAIM Exposure Index (MSRB)

The National Association of Active Investment Managers Exposure Index represents the average exposure to US equity markets by its members.

National Association of Home Builders (NAHB) Housing Market Index

The National Association of Home Builders Housing Market Index is based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next 6 months as well as the traffic of prospective buyers of new homes.

NASDAQ index

The NASDAQ-100 is composed of the 100 largest domestic and international non-financial securities listed on The Nasdaq Stock Market. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology, but does not contain securities of financial companies.

National Association of State Budget Officers (NASBO)

The National Association of State Budget Officers is a professional membership organization for state finance officers, and is the instrument through which the states collectively advance state budget practices.

National Retail Federation (NRF)

The National Retail Federation (NRF) is a retail trade association with members from all types of retail suppliers. Members include department stores, specialty, discount, catalog, internet and independent retailers, restaurant chains and grocers, as well as businesses that supply goods and services to retailers. The NRF forms an umbrella over more than 100 other state, national and international retail associations.

Nelson A. Rockefeller

The Nelson A. Rockefeller Institute of Government is a public policy research institute that conducts studies and related projects on state and local government and finance, American federalism, public management, and New York State issues.

NFIB Small Business Optimism Index

The small business optimism index is compiled from a survey that is conducted each month by the National Federation of Independent Business (NFIB) of its members. The index is a composite of ten seasonally adjusted components based on questions on the following: plans to increase employment, plans to make capital outlays, plans to increase inventories, expect economy to improve, expect real sales higher, current inventory, current job openings, expected credit conditions, now a good time to expand, and earnings trend.


The National Institute of Economic and Social Research (NIESR) is Britain’s independent economic research institute.

Nikkei index

The Nikkei 225 Stock Average is a price-weighted index comprised of the top 225 blue-chip companies on the Tokyo Stock Exchange.


Non-rated refers to bonds that have not been assigned a credit rating by large credit rating agencies such as Standard & Poor’s or Moody’s

Non rated bonds

Non-rated bonds have not been issued a rating by bond rating agencies such as Standard and Poors and Moodys. Bonds that have not been rated by an agency are usually considered to be junk bonds or fall below investment grade.

Non-Financial Commercial Paper

Non-financial commercial paper is short term debt (maturities less than 270 days)  issued by nonfinancial corporations.


The New York Stock Exchange is based in New York City, and is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities.


An organization consisting of the world’s major oil-exporting nations. The Organization of Petroleum Exporting Countries (OPEC) was founded in 1960 to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.


The subsidiaries of NASDAQ Inc. that provide financial services and operate marketplaces for securities in the Nordic and Baltic countries.

Operation Twist

Operation Twist is the name given to a Federal Reserve monetary policy operation that involves the purchase and sale of bonds. “Operation Twist” describes a monetary process where the Fed buys and sells short-term and long-term bonds depending on their objective.

Outright Monetary Transactions (OMT)

A program of the European Central Bank under which the bank makes purchases (“outright transactions”) in secondary, sovereign bond markets, under certain conditions, of bonds issued by Eurozone member-states.


A technical analysis term that describes the state of a security in which the price has made an extended move to the upside. When prices reach these levels, a correction is possible.

Overnight Index Swap (OIS)

An interest rate swap involving the overnight rate being exchanged for a fixed index rate.

Payrolls Report

The non-farm payroll report is intended to represent the total number of paid workers in the U.S. minus farm employees, government employees, private household employees and employees of nonprofit organizations.

P/B Multiple

P/B Multiple Compares a stock’s market value to the value of total assets less total liabilities (book value). Determined by dividing current stock price by common stockholder equity per share (book value), adjusted for stock splits.

PE Ratio

The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.

People’s Bank of China (PBOC)

Central bank of mainland China which controls monetary policy and regulates financial institutions.

P/FE Multiple

A tool for comparing the prices of different common stocks by assessing how much the market is willing to pay a share of each corporation’s estimated future earnings. It is calculated by dividing the current market price of a stock by the earnings per share estimate for the future period.

Personal Consumption Expenditures (PCE)

Personal consumption expenditures (PCE) is a measure of price changes in consumer goods and services released monthly by the Bureau of Economic Analysis (BEA). Personal consumption expenditures consist of the actual and imputed expenditures of households; the measure includes data pertaining to durables, nondurables, and services. It is essentially a measure of goods and services targeted toward individuals and consumed by individuals.

Personal Income

Personal income is the dollar value of income from all sources by individuals in the U.S., and is reported monthly along with personal spending (or personal outlays) by the United States Bureau of Economic Analysis (BEA).

Personal Spending

Personal spending is the dollar value of purchases of durable and non-durable goods and services by consumers in the U.S. and is reported monthly along with personal income by the United States Bureau of Economic Analysis (BEA).

Philadelphia Fed Index

Philadelphia Federal Index is a regional federal-reserve-bank index measuring changes in business growth. The index is constructed from a survey of participants who voluntarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates factory-sector growth, and when below 0 indicates contraction.

Philly Fed Survey

The Philadelphia Fed Survey is a business outlook survey used to construct an index that tracks manufacturing conditions in the Philadelphia Federal Reserve district. The Philadelphia Fed survey is an indicator of trends in the manufacturing sector, and is correlated with the Institute for Supply Management (ISM) manufacturing index, as well as the industrial production index.

Porter Analysis

Porter’s five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An “unattractive” industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”, in which available profits for all firms are driven down to zero.


Producer Price Index is an inflationary indicator published by the U.S. Bureau of Labor Statistics to evaluate wholesale price levels in the economy.

Price to Book

Price to book ratio is the  stock’s capitalization divided by its book value. The value is the same whether the calculation is done for the whole company or on a per-share basis. This ratio compares the market’s valuation of a company to the value of that company as indicated on its financial statements.

Price to Book Value

Price to Book Value is a ratio used to compare a stock’s market value to its book value.

Price to Cash Flow

Price to Cash Flow is a measure of the market’s expectations of a firm’s future financial health.

Price to Dividends

Price to Dividends is the ratio of the price of a share on a stock exchange to the dividends per share paid in the previous year, used as a measure of a company’s potential as an investment

Price to Forward Earnings

Price to Forward Earnings is a measure of the price-to-earnings ratio (P/E) using forecasted earnings for the P/E calculation.

Price to Net Asset Value

Price to Net Asset Value per share ratio is calculated as the previous day’s closing share price divided by net tangible asset value (NTAV) per share.

Principal-Protected Note – PPN

Principal-Protected Note – PPN is a fixed-income security that guarantees a minimum return equal to the investor’s initial investment (the principal amount).

Private Equity

Private equity is money invested in companies that are not publicly traded on a stock exchange or that is invested as part of buyouts of publicly traded companies in order to make them private companies.

Producer Price Index (PPI)

The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a series of indexes that measure the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. The headline PPI (for finished goods) is a measure of the average price level for a fixed basket of capital and consumer goods for prices received by producers.

Purchasing Managers Index (PMI)

Purchasing Managers Indexes are economic indicators derived from monthly surveys of private sector companies, and are intended to show the economic health of the manufacturing sector. A PMI of more than 50 indicates expansion in the manufacturing sector, a reading below 50 indicates contraction, and a reading of 50 indicates no change. The two principal producers of PMIs are Markit Group, which conducts PMIs for over 30 countries worldwide, and the Institute for Supply Management (ISM), which conducts PMIs for the US.

Purchasing Power Parity (PPP)

Purchasing Power Parity (PPP) is an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power.

Purchasing power risk or Inflation risk

Purchasing power risk is the risk that unexpected changes in consumer prices will penalize an investor’s real return from holding an investment. Because investments from gold to bonds and stock are priced to include expected inflation rates, it is the unexpected changes that produce this risk. Fixed income securities, such as bonds and preferred stock, subject investors to the greatest amount of purchasing power risk since their payments are set at the time of issue and remain unchanged regardless of the inflation rate.

Quantitative Easing (QE)

Quantitative Easing (QE) refers to the Federal Reserve’s (Fed) current and/or past programs whereby the Fed purchases a set amount of Treasury and/or Mortgage-Backed securities each month from banks. This inserts more money in the economy (known as easing), which is intended to encourage economic growth.

Reformulated Blendstock for Oxygenate Blending (RBOB)

Gasoline futures contract


Real Estate Investment Trust.

Relative Strength Index

Relative Strength Index  (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.

Reserve Bank of Australia (RBA)

The Reserve Bank of Australia is Australia’s central bank. It’s main responsibility is involvement in Australia’s monetary policy.

Retail Sales

Retail sales measure the total receipts at retail and food services stores that sell merchandise and related services to final consumers. Data are collected from the Monthly Retail Trade Survey conducted by the U.S. Bureau of the Census. Retail sales cover both the durables and nondurables portions of consumer spending, which together typically accounts for about two-thirds of GDP, and is therefore a key element in economic growth.


Risk-on risk-off refers to changes in investment activity in response to global economic patterns. During periods when risk is perceived as low, risk-on risk-off theory states that investors tend to engage in higher-risk investments. When risk is perceived as high, investors have the tendency to gravitate toward lower-risk investments.

Risk Premiums

Required return in excess of the risk-free rate.


An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company’s annual earnings by its total assets, ROA is displayed as a percentage.


The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.


A calculation used to assess a company’s efficiency at allocating the capital under its control to profitable investments. The return on invested capital measure gives a sense of how well a company is using its money to generate returns.


R-Squared: Indicates what percentage of a manager’s movement in performance is explained by movement in performance in its benchmark. R-squared ranges from 0 to 100 and a score of 100 suggests that all movements of a manager’s performance are completely explained by movements in the index.

Russell 1000 Growth Index

Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.

Russell 1000 ValueIndex

Russell 1000® ValueIndex measures the performance of those Russell 1000 companies considered undervalued relative to comparable companies.

Russell 2000

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

Russell Microcap Index

A capitalization weighted index of 2,000 small cap and micro cap stocks that captures the smallest 1,000 companies in the Russell 2000, plus 1,000 smaller U.S.-based listed stocks.

Russell Midcap Index

The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index.

Securities and Exchange Commission (SEC)

U.S. federal agency responsible for the oversight of the country’s stock and option exchanges.

Semiconductor Index (SOX)

A price-weighted index composed of 18 U.S. semiconductor companies primarily involved in the design, distribution, manufacture, and sale of semiconductors.

Sensex (India)

An abbreviation of the Bombay Exchange Sensitive Index (Sensex) – the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India


The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

SET Index

The SET index is an index calculated based on the prices of all common stocks that trade on the main board of the Stock Exchange of Thailand (SET), other than those that have been suspended more than one year.

Simple Moving Average (SMA)

A simple moving average (SMA) is a simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react.

Shanghai Composite Index

The Shanghai Stock Exchange Composite Index is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listedon the Shanghai Stock Exchange. The index was developed on December 19, 1990 with a base value of 100. Index trade volume on Q is scaled down by a factor of 1000.

Sharpe Ratio

Sharpe Ratio: A risk-adjusted measure of performance evaluation. It compares the return above the risk-free rate earned as compared to the corresponding risk assumed by the portfolio, as measured by standard deviation. Good risk-adjusted performance is indicated by a higher Sharpe Ratio.

Shenzhen Index

The Shenzhen Index is an index of 40 stocks that trade on the Shenzhen Stock Exchange in China. Many of the companies within this market are subsidiaries of state-run companies.

Short Interest

Percentage of shares outstanding that have been borrowed and sold short.


Short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to the lender. The short seller hopes to profit from a decline in the price of the assets between the sale and the repurchase, as the seller will pay less to buy the assets than the seller received on selling them.

Spot Rate Treasury Curve(SPI)

A yield curve made using Treasury spot rates rather than yields.

Small Cap

Small cap is a term used to classify companies with a relatively small market capitalization. The definition of small cap can vary, but it is generally a company with a market capitalization of between $300 million and $2 billion. The prices of small cap stocks are generally more volatile than large cap stocks.

Social Progress Index (SPI)

Measures country level performance while incorporating the impact on people and the environment.

Special purpose vehicles (SPV)

A legal entity, generally a subsidiary, created for a specific purpose with a corporate structure that secures its assets, even in the event the parent company goes bankrupt.


Spread is the difference between the bid and the ask price of a security or asset.

Spread (High-Yield)

High-Yield spread is the yield differential between the average yield of high-yield bonds and the average yield of comparable maturity Treasury bonds.

S&P CoreLogic Home Price Index

The S&P CoreLogic Home Price Index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales.

S&P 100 Index

The Standard & Poor’s 100 Index is a part of the S&P 500 Index that measures the stock performance of 100 of the largest companies in the S&P 500.

S&P 500 Index

The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P 600 Index

An index of small-cap stocks managed by Standard and Poor’s. The S&P 600 SmallCap Index covers a broad range of small cap stocks in the United States. The index is weighted according to market capitalization and covers about 3-4% of the total market for equities in the United States.

Sovereign Debt

Sovereign Debt is the amount of money that a country’s government has borrowed, typically issued as bonds denominated in a reserve currency.

S&S&P MicroCap Index

An index of micro-cap stocks managed by Standard and Poor’s. The index is weighted according to market capitalization.

Standard Deviation

Standard deviation is a historical measure of the variability of returns relative to the average annual return. A higher number indicates higher overall volatility.

STOXX Europe 600

The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

S&P/LSTA Leveraged Loan Total Return Index

The S&P LSTA U.S. Leveraged Loan 100 Index measures the performance of the largest facilities in the leveraged loan market.


The strategic asset allocation process projects a three- to five-year time period. While the strength of the asset allocation decisions is retested often, we do not anticipate making adjustments until midway through the strategic time frame, which generally is about every two to three years. If significant market fluctuations warrant a change, adjustments may be made sooner.

Systemically Important Financial Institution (SIFI)

A systemically important financial institution (SIFI) is a financial institution whose failure might trigger broader problems for the economy.


Swap is a derivative in which counterparties exchange certain benefits of one party’s financial instrument for those of the other party’s financial instrument. The benefits in question depend on the type of financial instruments involved.

The Tankan Survey

The Tankan Survey is an economic survey conducted by the Bank of Japan of thousands of Japanese businesses, where businesses are asked about current trends and conditions, as well as business expectations for the next quarter and year.


Tapering refers to the Federal Reserve (Fed) slowing the pace of bond purchases in their Quantitative Easing (QE) program. To execute QE, the Fed purchases a set amount of Treasury and Mortgage-Backed bonds each month from banks. This inserts more money in the economy (known as easing), which is intended to encourage economic growth. Lowering the amount of purchases (tapering) would indicate less easing of monetary policy.


Tactical portfolios are designed to be monitored over a shorter time frame to potentially take advantage of opportunities as short as a few months, weeks, or even days. For these portfolios, more timely changes may allow investors to benefit from rapidly changing opportunities within the market.

Tail Risk

Tail risk is a technical measure of portfolio risk that arises when there is an increased probability that an investment will experience a price swing much larger than it would be expected to under normal conditions. Tail risks include market events that generally would have a small chance of occurring.

Tax Awareness

Tax Awareness: In the Tax Aware portfolios, LPL Financial Research places an emphasis on minimizing the impact of taxes. These portfolios employ investments and strategies that attempt to limit the effect of taxes.

TED Spread

The TED spread is the yield differential between three-month London interbank offered rate (Libor) and the three-month U.S. T-bill rate. The European version of this measure would consider the difference between the three-month Euribor (interbank lending rate) and the three month German T-bill yield. This is considered an effective measure of the liquidity available to banks.

Technical Analysis

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

The Bureau of Economic Analysis

The Bureau of Economic Analysis is a division of the U.S. federal government’s Department of Commerce that is responsible for the analysis and reporting of economic data used to confirm and predict economic trends and business cycles. Reports from the Bureau of Economic Analysis are the foundation upon which many economic policy decisions are made by government, and many investment decisions are made in the private sector by companies and individual investors.

The Bureau Of Labor Statistics

The Bureau Of Labor Statistics is a government agency that produces economic data that reflects the state of the U.S. economy. This data includes the Consumer Price Index, the unemployment rate and the Producer Price Index.

The Dodd–Frank Wall Street Reform and Consumer Protection Act

The Dodd–Frank Wall Street Reform and Consumer Protection Act is a federal statute in the United States that was signed into law by President Barack Obama on July 21, 2010. The Act implements financial regulatory reform sponsored by the Democratically controlled 111th United States Congress and the Obama administration. Passed as a response to the late-2000s recession.

The Federal Reserve

The Federal Reserve is the central bank of the United States. Its unique structure includes a federal government agency, the Board of Governors, in Washington, D.C., and 12 regional Reserve Banks (Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas city, Minneapolis, New York, Philadelphia, Richmond, San Francisco, and St. Louis).

The Federal Reserve Bank

The Federal Reserve Bank is the banks that carry out Fed operations, including controlling the money supply and regulating member banks. There are 12 District Feds, headquartered in Boston, New York, Philadelphia, Cleveland, St. Louis, San Francisco, Richmond, Atlanta, Chicago, Minneapolis, Kansas City and Dallas.

The International Monetary Fund (IMF)

The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

The Irish Stock Exchange (ISEQ)

The Irish Stock Exchange (ISEQ) is a limited company trading equities, government and corporate bonds, investment funds, and specialist securities such as asset-backed debt, securitized bonds, and warrants. Most company securities trade on ISE Xetra, the exchange’s electronic trading system, and are settled in CREST. Irish government bonds are traded on EuroMTS, the electronic trading system for market makers in Irish government bonds, and are settled through Euroclear.

The Organization of Economic Cooperation and Development (OECD)

The Organization of Economic Cooperation and Development (OECD) brings together the governments of countries committed to democracy and the market economy from around the world to support sustainable economic growth, Boost employment, raise living standards, maintain financial stability, assist other countries’ economic development, and contribute to growth in world trade.

The Plaza Accord

The Plaza Accord is a 1985 agreement among the G-5 nations (France, Germany, the United States, the United Kingdom and Japan) to manipulate exchange rates by depreciating the U.S. dollar relative to the Japanese yen and the German Deutsche mark. Also known as the Plaza Agreement, the Plaza Accord’s intention was to correct trade imbalances between the U.S. and Germany and the U.S. and Japan, but it only corrected the trade balance with the former.

The Richmond Fed

The Richmond Fed is one of 12 Reserve Banks that, including the Board of Governors, encompasses the Federal Reserve System with offices located in Richmond, Baltimore and Charlotte. Our regions include Virginia, Maryland, the Carolinas, the District of Columbia and most of West Virginia.

The Statutory Debt Limit

The Statutory Debt Limit was established under the Second Liberty Bond Act of 1917 that limits the amount of public debt that can be outstanding. The Statutory Debt Limit, or debt ceiling, prevents the U.S. Treasury from issuing new debt once the limit has been reached. However, the debt limit can be raised, and has often been raised, with approval from the U.S. Congress.

The Supplementary Financing Program (SFP)

The Federal Reserve working with the Treasury Department launched the SFP during the fall of 2008 in response to the financial crisis. The SFP allowed for a vast increase in t-bill issuance and was intended as an emergency measure to improve liquidity in the financial system. As liquidity improved and financial markets recovered the SFP gradually declined before its recent increase.

The United States Census Bureau

The United States Census Bureau is a division of the federal government of the United States Bureau of Commerce that is responsible for conducting the national census at least once every 10 years, in which the population of the United States is counted. The Bureau of Census is also responsible for collecting data on the people, economy and country of the United States.

Thomson Reuters

A global information provider headquartered in London, England, and serving professionals in the financial services, media and corporate markets. The news agency provides text, graphics, video and pictures to subscribers around the world, including general and economic news.

Tracking Error

Tracking Error: A measure of the consistency or volatility (standard deviation) of excess returns relative to a benchmark.

Trailing P/E

The sum of a company’s price-to-earnings, calculated by taking the current stock price and dividing it by the trailing earnings per share for the past 12 months. This measure differs from forward P/E, which uses earnings estimates for the next four quarters.


Treasuries are a marketable, fixed-interest U.S. government debt security. Treasury bonds make interest
payments semi-annually and the income that holders receive is only taxed at the federal level.

Treasury Bill (T-Bill)

A Treasury Bill, or T-Bill is a short-term obligation with a maturity of less than one year backed by the U.S. Government. T-Bills are issued at a discount from par, while the investor receives full par value at maturity. T-Bills don’t pay interest payments like conventional bonds, and instead the price appreciation is the return the investor receives.

Treasury Inflation-Protected Securities (TIPS)

Treasury inflation-protected securities (TIPS) help limit inflation risk to your portfolio, as the principal is adjusted semiannually for inflation based on the Consumer Price Index (CPI)-while providing a real rate of return guaranteed by the U.S. government. However, a few things you need to be aware of is that the CPI might not accurately match the general inflation rate; so the principal balance on TIPS may not keep pace with the actual rate of inflation. The real interest yields on TIPS may rise, especially if there is a sharp spike in interest rates. If so, the rate of return on TIPS could lag behind other types of inflation-protected securities, like floating rate notes and T-bills. TIPs do not pay the inflation-adjusted balance until maturity, and the accrued principal on TIPS could decline, if there is deflation.

Treasury International Capital (TIC)

Treasury International Capital (TIC) is select groups of capital which are monitored with regards to their international movement. Treasury international capital is used as an economic indicator that tracks the flow of Treasury and agency securities, as well as corporate bonds and equities, into and out of the United States. TIC data is important to investors, especially with the increasing amount of foreign participation in the U.S. financial markets.

TRIN Index

A technical analysis indicator that compares advancing and declining stock issues and trading volume as an indicator of overall market sentiment.The index is calculated as (the number of advancing stocks/the number of declining stocks)/(the composite volume of advancing stocks/the composite volume of declining stocks).

Troubled Asset Relief Program (TARP)

U.S. asset purchase program implemented in the wake of the 2008 financial crisis to stabilize and strengthen domestic financial and housing markets.


Unemployment occurs when people without jobs are actively seeking, but unable to find, work. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. An unemployment report is an economic report that shows the number of employed and unemployed workers, and may also include an unemployment rate. In the European Union this data is released monthly by Eurostat.

Unemployment Rate

The unemployment rate is the percentage of the total labor force that is unemployed but actively seeking employment and willing to work.

Underemployment Rate

Underemployment Rate – A measure of employment and labor utilization in the economy that looks at how well the labor force is being utilized in terms of skills, experience and availability to work. Labor that falls under the underemployment classification includes those workers that are highly skilled but working in low paying jobs, workers that are highly skilled but work in low skill jobs and part-time workers that would prefer to be full-time. This is different from unemployment in that the individual is working but isn’t working at their full capability.

Up Capture

Up Capture / Down Capture: Measure the percentage of the benchmark’s return captured by the portfolio in up / down periods.

U.S. Institute for Supply Managers (ISM) manufacturing index

The U.S. Institute for Supply Managers (ISM) manufacturing index is an economic indicator derived from monthly surveys of private sector companies, and is intended to show the economic health of the U.S. manufacturing sector. A PMI of more than 50 indicates expansion in the manufacturing sector, a reading below 50 indicates contraction, and a reading of 50 indicates no change.

Vehical Sales

Vehicle sales is the number of domestically produced units of cars, SUVs, minivans, and light trucks that are sold. These sales are reported on the first business day of the month.


The VIX is a measure of the volatility implied in the prices of options contracts for the S&P 500.  It is a market-based estimate of future volatility.  When sentiment reaches one extreme or the other, the market typically reverses course. While this is not necessarily predictive it does measure the current degree of fear present in the stock market.

Volcker Rule

The Volcker Rule is a specific section of the Dodd–Frank Wall Street Reform and Consumer Protection Act originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers.

Weekly Petroleum Status Report

The Energy Information Administration’s report published every Wednesday containing commentary on oil supply and demand, as well as statistical data on crude oil and other petroleum products.

Weekly Petroleum Status Report

The Wilshire 5000 Total Market Index (Wilshire 5000) measures the performance of all U.S. equity securities with readily available price data. Approximately 5,000 capitalization-weighted security returns are used to adjust the index. The Wilshire 5000 base is its December 31, 1980 capitalization of $1,404.596 billion.

World Agriculture Supply and Demand Estimates (WASDE)

The World Agricultural Supply and Demand Estimates (WASDE) report is a monthly report published by the United States Department of Agriculture (USDA) providing comprehensive forecast of supply and demand for major crops (global and United States) and livestock (U.S. only).

Citigroup World Government Bond Index (WASDE)

The World Government Bond Index measures the performance of fixed-rate, local currency, investment-grade sovereign bonds.


Yield is the income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value.

Yield Curve

Yield Curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.

Yield Curve Inversion

Situation where longer term interest rate fall below shorter term interest rates.

Yield Spread

Yield Spread is the difference between yields on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument. The spread can be measured between debt instruments of differing maturities, credit ratings and risk.


Assumed yield if the security is held to maturity.

ZEW Survey

ZEW Survey is a main indicator of investors’ confidence. It is calculated on basis of 350 analysts’ and institutional investors’ polling. The indicator reflects the difference between analysts who are optimistic about forthcoming economic development of Germany within six months and those who are pessimistic. The Survey is used for German economic prospects estimation. ZEW Survey growth causes the euro growth.

Sector Definitions

The Consumer Discretionary Sector

Companies that tend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods, textiles and apparel, and leisure equipment. The service segment includes hotels, restaurants and other leisure facilities, media production and services, consumer retailing and services, and education services.

Consumer Staples Sector

Companies whose businesses are less sensitive to economic cycles. It includes manufacturers and distributors of food, beverages and tobacco, and producers of non-durable household goods and personal products. It also includes food and drug retailing companies.

Cyclical Stock

An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies that sell discretionary items that consumers can afford to buy more of in a booming economy and will cut back on during a recession. Contrast cyclical stocks with counter-cyclical stocks, which tend to move in the opposite direction from the overall economy, and with consumer staples, which people continue to demand even during a downturn.

Energy Sector

Companies whose businesses are dominated by either of the following activities: The construction or provision of oil rigs, drilling equipment and other energy-related service and equipment, including seismic data collection. The exploration, production, marketing, refining and/or transportation of oil and gas products, coal and consumable fuels.

Financials Sector

Companies involved in activities such as banking, consumer finance, investment banking and brokerage, asset management, insurance and investment, and real estate, including REITs.

Health Care Sector

Companies are in two main industry groups—Health care equipment and supplies or companies that provide health care-related services, including distributors of health care products, providers of basic health care services, and owners and operators of health care facilities and organizations. Companies primarily involved in the research, development, production, and marketing of pharmaceuticals and biotechnology products.

Industrials Sector

Companies whose businesses manufacture and distribute capital goods, including aerospace and defense, construction, engineering and building products, electrical equipment and industrial machinery. Provide commercial services and supplies, including printing, employment, environmental and office services. Provide transportation services, including airlines, couriers, marine, road and rail, and transportation infrastructure.

Manufacturing Sector

Companies engaged in chemical, mechanical, or physical transformation of materials, substances, or components into consumer or industrial goods.

Materials Sector

Companies that are engaged in a wide range of commodity-related manufacturing. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, forest products and related packaging products, metals, minerals and mining companies, including producers of steel.


Companies include those that primarily develop software in various fields such as the Internet, applications, systems and/or database management and companies that provide information technology consulting and services; technology hardware & Equipment, including manufacturers and distributors of communications equipment, computers and peripherals, electronic equipment and related instruments, and semiconductor equipment and products.

Telecommunications Services Sector

Companies that provide communications services primarily through a fixed line, cellular, wireless, high bandwidth and/or fiber-optic cable network.

Utilities Sector

Companies considered electric, gas or water utilities, or companies that operate as independent producers and/or distributors of power.

S&P 500 Coal & Consumable Fuels

Companies that are engaged in the mining, production, processing and export of coal.

S&P 500 Health Care Facilities

Companies that own or operate health care facilities such as hospitals, long-term care facilities, and medical office properties.

S&P 500 Diversified Financial Services

Diversified financial services companies that provides a range of financial products and services to consumers, corporations, governments, and institutions worldwide including consumer and commercial lending and capital markets services.

S&P 500 Food & Staples Retailing

Companies that own and operate various retail formats including supermarkets, supercenters, warehouse clubs and drug stores.

S&P 500 Oil & Gas Exploration & Production

Companies that are engaged in the discovery, production, processing and refining of oil and natural gas.

S&P 500 Gas Utilities

Companies involved in the gathering, storage and distribution of natural gas for power generation.

S&P 500 Oil & Gas Drilling

Companies that provide drilling services for oil and gas production.

S&P 500 Health Care Services

Companies involved in the delivery of health care services.

S&P 500 Managed Health Care

Companies involved in providing health care benefits including group insurance and other diversified health care services.

S&P 500 Life Sciences Tools & Services

Companies that provide drug development and other product development services, equipment, software and services for research, manufacturing discovery and medical diagnostics.

S&P 500 Electric Utilities

Companies involved in electricity generation from nuclear, fossil, hydro, renewable and other sources.

S&P 500 Construction Materials

Companies that provide raw and intermediate stage materials for use in construction of infrastructure such as roads and bridges.

S&P 500 Specialty Retail

Retailers in the sales of specialty products such as apparel, accessories, jewelry and other luxury goods.

S&P 500 Homebuilding

Companies involved in the development and construction of single-family homes and housing developments.

S&P 500 Telecommunications Services

Companies that provide communications services to retail and commercial customers.

S&P 500 Constructions and Farm Machinery

Companies involved in the manufacturing of heavy equipment for use in construction and farming industries.