This glossary of investment and related terms provides simple definitions of terms that you may need to know.

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

--- J ---

Junk bond:

Bond purchased for speculative purposes. They are usually rated BB and lower, and they have a higher default risk.

--- K ---

Keogh Plan

A tax-deferred retirement account for self-employed individuals or employees of unincorporated businesses. Keogh plans can be funded with mutual fund shares. (Also know as H.R. 10 Plans.)

--- L ---

Ladder Strategy

A strategy in which a bond portfolio is constructed to have approximately equal amounts invested in each maturity within a given range, to reduce interest rate risk.

Lagging indicator:

Economic indicator that changes directions after business conditions have turned around.

Leading indicator:

Economic indicator that changes direction in advance of general business conditions.

Limit order:

An order placed with a broker to buy or sell at a price as good or better than the specified limit price.

Liquidity:

The degree of ease and certainty of value with which a security can be converted into cash.

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