Index ETF’s

A statistical indicator providing a representation of the valueof the securities which constitute it. Indices often serve asbarometers for a given market or industry and benchmarksagainst which financial or economic performance is measured.
Exchange Traded Fund. A fund that tracks an index, but can be traded like a stock. ETFs always bundle together thesecurities that are in an index; they never track actively managed mutual fund portfolios (because most activelymanaged funds only disclose their holdings a few times a year, so the ETF would not know when to adjust its holdings most of the time). Investors can do just about anything with an ETF that they can do with a normal stock, such as short selling. Because ETFs are traded on stock exchanges, they can be bought and sold at any time during the day (unlike most mutual funds). Their price willfluctuate from moment to moment, just like any other stock’s price, and an investor will need a broker in order topurchase them, which means that he/she will have to pay acommission. On the plus side, ETFs are more tax-efficientthan normal mutual funds, and since they track indexes they have very low operating and transaction costsassociated with them. There are no sales loads orinvestment minimums required to purchase an ETF. The first ETF created was the Standard and Poor’s DepositReceipt (SPDR, pronounced “Spider”) in 1993. SPDRs gave investors an easy way to track the S&P 500 without buying an index fund, and they soon become quite popular.

Bear Funds

Funds that utilize short-selling methods to quickly makeprofits during a bear or declining market. These funds are usually made up of hedge funds and mutual funds. They are actively managed, and short individual stocks or inverse-index funds that short entire indexes. Bear funds revolve around the idea of playing with both sides of the market so that gains in the bear fund offset losses elsewhere in aninvestor’s portfolio. Bear funds are considered tacticalinvestments, but usually end up being lousy long-terminvestments for investors.

Bear Funds

Funds that utilize short-selling methods to quickly makeprofits during a bear or declining market. These funds are usually made up of hedge funds and mutual funds. They are actively managed, and short individual stocks or inverse-index funds that short entire indexes. Bear funds revolve around the idea of playing with both sides of the market so that gains in the bear fund offset losses elsewhere in aninvestor’s portfolio. Bear funds are considered tacticalinvestments, but usually end up being lousy long-terminvestments for investors.

Equity mutual funds

An open-ended fund operated by an investment companywhich raises money from shareholders and invests in agroup of assets, in accordance with a stated set ofobjectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then takethe money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various stocks. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuatedaily, depending upon the performance of the securitiesheld by the fund. Benefits of mutual funds includediversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but chargefees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund, capital appreciation fund, clone fund, closed fund, crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, regional fund, sector fund,specialty fund, and stock fund.

Equity mutual funds

An open-ended fund operated by an investment companywhich raises money from shareholders and invests in agroup of assets, in accordance with a stated set ofobjectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then takethe money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various stocks. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuatedaily, depending upon the performance of the securitiesheld by the fund. Benefits of mutual funds includediversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but chargefees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund, capital appreciation fund, clone fund, closed fund, crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, regional fund, sector fund,specialty fund, and stock fund.