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What is VAT, or value added tax? Hit play to find out.

What is the Advance Decline Ratio? The advance decline ratio is used to determine how the market performed on a given day. It does this by comparin...

What does “Breaking the Buck” mean? Breaking the buck means that a money market fund’s value has dropped to less than $1. This happens becaus...

What is Disinflation? Disinflation is a term used for an interim slowdown of inflation rate. For example, a reduction of inflation growth from 3.5%...

Market manipulation is manipulation of the, uh... market. Like...illegally. Yeah, any sort of "scheme" is probably something you want to avoid.

What is Collateralized Mortgage Obligation (CMO)? A CMO is a mortgage bond that consists of a large number of different individual mortgages bundle...

What are ascending and descending tops and triangles? Ascending and descending tops and triangles are used to describe market performance graphs. T...

What are Capital Markets? The most often context used for “Capital Markets” is in corporate finance and investment banking, and it refers prima...

A fundamental analyst is basically the opposite of a chartist - they care about a company's earnings, profit margins, gross rates, etc.

What are overbought and oversold? Hit play to find out.

What is volatility? In the world of investing, volatility basically means riskiness. It looks at the returns for stocks or indexes, and if they are...

What is Alpha? Alpha is an investing term that describes the success of an investment. It looks at the investment’s ability to beat beta (or mark...

What is Beta? Beta is a figure associated with public companies that measures how risky the company’s stock is in comparison to the market as a w...

What is short interest theory? Watch this not-so-short video to find out.

What is a thin market, and has it been on Jenny Craig recently?

What are moving averages? Moving averages are calculated using past stock prices in an attempt to determine future trends. It’s calculated by ave...

What is Above Full Employment Equilibrium? Above Full Employment Equilibrium happens when an economy is basically doing more than it realistically...

What is a High Alpha Investor? A high alpha investor invests in securities with alpha values of 1 or higher. This means that the mutual fund or sto...

The Sharpe Ratio is a calculation used by investors to measure the dynamics between risk and reward. TL;DR: lottery tickets=bad.

What is covariance? Covariance is the comparison of how assets move in the markets. Positive covariance is when assets move in tandem, such as when...

What is the Alternative Minimum Tax? Alternative minimum tax is a different way of calculating tax liability. It’s only available to some individuals and companies though; eligibility depends on income and different exemptions that can be claimed. After factoring in deductions that the taxable entity is eligible for, the alternative minimum tax exemption is subtracted from income to determine the amount that will be taxed.

What are Angel Investors and Seed Funds? Angel investors provide the funds for small start-ups. They are usually family and friends (not institutional or highly experienced investors) and make one-time investments. Seed funds refer to the money that angel investors put in. They are used to start a company and give the investor a percentage of the company in equity.

The Russell Index is a series of indices that tracks the progress of stocks in a given basket. Aw. We were hoping it tracked adorable Jack Russell Terriers, or something...

The Investment Company Act of 1940 regulated and ensured fair dealings in the mutual fund industry.

How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in ten billion that you win, then it's a bad bet, ten times over.

What is Counterparty Risk? Counterparty risk is the risk to either party within a transaction that the other will not or be unable to abide by the terms of the transaction agreement. This can be in the form of payment default or in providing asset or funding in accordance to the agreement schedule, or a host of other factors.

What are Bond Anticipation Notes (BANS), Revenue Anticipation Notes (RANS), and Tax Anticipation Notes (TANS)? BANS, RANS and TANS are all short-term debt instruments (average of 1 year maturity) issued by municipalities for various projects. In the case of BANS, they are to be repaid by a bond underwriting that is already in the works and the BAN is for interim finance. In the case of RANS, the notes are paid off by forthcoming revenues generated, such as by tolls. TANS are paid off by future taxes, such as for a public park or other project. BANS, TANS and RANS are all tax free like standard municipal bonds.

What is the Fast Market Rule? The fast market rule is something that is used in the U.K. to keep the market under control when any sort of crash happens. It allows big traders and firms to trade outside of quoted trading ranges so that huge changes in price do not have as big of an effect.

What is the Dow Jones Industrial Average? The Dow Jones Industrial Average is usually just called the Dow. It’s an average of 30 of the most well-known and influential stocks. Using these stocks, it determines how the market is performing overall.

What do you need to retire? Retirement - think: 401k, pension fund, IRA, roth IRA, etc. All of these savings socked away while you worked hard are tax-deferred. Ordinary income tax gets applied when you take the money out and actually use it.

"Investment grade" indicates the quality of an investment. If it's investment grade, it's, well...worth investing in. Highly rated, and not too risky.

What are lenders? Lenders are parties which can be individuals, groups or institutions that are engaged in making liquid funds that they either own or can access available to other parties in return for repayment plus interest over agreed upon time periods.

Subsidies are government donations given to industries who cannot operate profitably with the goal of keeping American citizens employed on the taxpayer's nickel.

Term to maturity is kind of the life cycle of a bond, but luckily for the bond, it gets to skip puberty.

When-issued is a trading condition that applies to structural changes in companies that result in a new entity with its own set of trading rules.

What is suspended trading? It has nothing to do with suspenders, which is a bummer...we love suspenders. They're so jaunty.

The Wilshire 5000 is an index fund, which is kind of a bummer...it sounded like a cool financial robot.

What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger. This would be an accounting detail that would be either footnoted or astericked. Some examples would be on a new product’s warranty, in which the number of repairs or defect returns is unknown at the time, or if there is a lawsuit decision pending that can impact financials.

What are T-Notes, T-Bonds, and TIPS? T-Notes are debt securities (like bonds) that are issued by the government and mature within one to 10 years. T-Bonds are exactly the same but their maturity is longer...more than 10 years. TIPS stands for treasury inflation protected securities. The government also issues TIPS; these securities are extremely safe, because not only are they backed but the government, but they also account for inflation and protect the investor in that way.

What is interest? In order to create an incentive for a lender, a borrower usually repays debt with interest, a percentage of overpayment for the loan that gives the lender an agreed upon profit. Banks pay depositors interest for the use of their money. Corporations pay interest to investors who buy their bonds. Even the government pays interest to purchasers of US Treasury bonds and notes. The interest is often commensurate with the risk of default, so higher risk borrowers often have to pay higher interest rates for the opportunity to borrow.