GCPA Glossary

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Market risk
Refers to the potential of loss that is possible as a result of short-term volatility in the stock market. Factors include political, social and economic events.

Market timing
Market timing involves trying to predict what the market will do and purchasing or selling stocks to benefit from the movements of the market. It has not been proven that anyone can time the market successfully for any length of time.

Market-valued account
An investment account whose value fluctuates with the market prices of the specific securities within the account's portfolio and offers no guarantee of principal and interest.

Maturity
The date on which a debt is due for payment or a bond is repaid. The average weighted maturity of a bond portfolio is the portfolio's time to maturity, weighted by the dollar value of the bonds comprising the portfolio.

Merrill Lynch High Yield Master Index
An index used to gauge the general performance of high yield (junk) debt securities. An index is unmanaged and you cannot invest directly in an index.

Mid-cap
A medium sized company or a mutual fund that invests almost exclusively in medium sized companies. A company's size is usually determined by the dollar value of its assets and earnings.

Minimum investment
Most funds have an initial minimum investment that may range from $50-$2,500.

Money market investments
Money market investments are short-term securities that carry little risk, such as banker's acceptances, commercial paper, repos, negotiable certificates of deposit and Treasury bills. Money market mutual funds invest in these types of short-term investments; as a result, the risk of losing any of the principle investment is lower. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money. A money market mutual fund is not insured or guaranteed by the FDIC.

Mortgage-backed securities
Securities backed by a pool of mortgages. Mortgage payments are "passed through" to the investor. Mortgage-backed securities are primarily issued by federal agencies.

Mutual company
A life insurance company owned by policyowners rather than stockholders.

NASDAQ Composite Index
The NASDAQ Composite Index is generally considered representative of high growth stocks. It is a market-weighted index where each company's stock value affects the index in proportion to its market value. An index is unmanaged and you cannot invest directly in an index.

Negotiable certificates of deposit
A CD with a very large denomination, usually $1 million or more. Usually bought by institutional investors. Also called a jumbo CD.

Net asset value (NAV)
The value of a mutual fund share. Determined by dividing the total value of the fund's assets by the number of outstanding shares. This value is calculated daily by the fund.

Net assets
The value resulting from assets minus liabilities.

New York Stock Exchange Composite Index
The New York Stock Exchange Composite Index is an average of the price changes of all the common stocks listed and traded on the New York Stock Exchange. It is expressed in index points relating the current index value to a base index value. (The base for the NYSE Composite Index was set at 50.00 on Dec. 31, 1965.) The NYSE Composite Index is the only major measure that reflects the whole NYSE market.

No minimum fund
A mutual fund with no minimum investment required.

No-load mutual fund
A fund that does not charge a sales fee. However, funds may charge 12(b)1 fees as well as other management expenses. Refer to the fund's prospectus for complete information on risks, fees and expenses.

Occupation class
The category assigned to an insured by the insurance company based on the individual's job duties. The insured's category dictates the policy premium and contractual grouping.

Offering price
The price to buy one share of a specific stock or mutual fund.

Ongoing expenses
Fund expenses which are incurred annually, including management fees.

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