GCPA Glossary

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Deferred compensation plan
A plan established by an employer to provide benefits to an employee at a later date, such as after retirement.

Depreciation
The decrease in the value of a security.

Disability income insurance coverage
Health insurance under which benefits are payable in regular installments designed to replace some of the insured's income when he or she is totally disabled as defined in the policy.

Distributions
The amount of money per share of a mutual fund that is paid to shareholders, coming from the income or the interest earned by the securities contained in the portfolio.

Diversification
Within a fund, diversification is owning securities from a wide variety of unrelated businesses or industries. It allows the investor to help reduce the risk associated with a single security. For example, if one security experiences a price decline, it may be that another security's price will rise, off-setting the decline in the first security. Diversification cannot eliminate the risk of investment losses. Refer to the fund's prospectus for complete information on risks, fees and expenses.

Dividends
Income distributed to shareholders. Dividends can be received from the ownership of stock or from mutual funds.

Dollar-cost averaging
A system of investing in which an individual deposits or contributes money into the same investments or mutual fund on a regular basis; usually monthly. This strategy may help lower the average share price of the investment. Using dollar cost averaging does not assure a profit and does not protect against loss in a declining market. Also, using this investment method involves continuous investment in securities regardless of fluctuating price levels of securities. Therefore, an investor should consider his/her financial ability to continue purchasing through periods of low price levels.

Dow Jones Industrial Average
The Dow Jones Industrial Average is considered representative of the general state of the stock market. It is a price-weighted index computed by summing the prices of the 30 companies and then dividing that total by an adjusted value to reflect stock splits over the years.

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