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

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Valuation:

The process of determining the current worth of an asset.

Value Line index:

The index represents 1,700 companies from the New York and American Stock Exchanges and the over-the-counter market. It is an equal-weighted index, which means each of the 1,700 stocks, regardless of market price or total market value, are weighted equally.

Variability:

The possible different outcomes of an event. As an example, an investment with many different levels of return would have great variability.

Vesting:

The period of time an employee must work at a firm before gaining access to employer-contributed pension income. For 401(k) plans, employee contributions are immediately vested, but employer contributions may be vested over a period of several years.

--- W ---

Wilshire 5000 equity index:

A stock market measure comprising 5,000+ equity securities. It includes all New York Stock Exchange and American Stock Exchange issues and the most active over-the-counter issues. The index represents the total dollar value of all 5,000 stocks.

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--- Y ---

Yield curve:

A curve that shows interest rates at a specific point for all bonds having equal risk but different maturity dates. Usually, government bonds are used to construct such curves.

Yield to maturity:

The rate of return anticipated on a bond if it is held until the maturity date.

Yield:

The amount of interest paid on a bond divided by the price. A measure of the income generated by a bond. A yield is not a total return measure because it does not include capital gains or losses.

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