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Glossary: # - A
401(k): This qualified retirement plan allows eligible employees to contribute a certain amount of compensation on a pre-tax basis; earnings are tax deffered. Employers may match a stated percentage of employee contributions to the plan. In many cases, employees have general responsibilities for investment choices and enjoy the direct tax savings. The reduced cost and liability of 401(k) plans appeals to many employers.

401(k) Loan:A 401(k) loan is taken from a 401(k) retirement account. Certain plans allow an individual to withdraw a percentage of an account balance, with set minimum and maximum amounts allows. The loan is generally paid back, with interest, through payroll deductions. If an individual leaves an employer with an outstanding loan, the full amount of the loan is generally due. If the individual fails to repay the loan, it is considered a distribution, and ordinary income taxes are due. In addition, an early withdrawal tax penalty may apply for individuals under the age of 59½.

403(b):Similar to the 401(k), this type of qualified retirement plan is available to employees of nonprofit and government organizations.

Account Balance: An account balance is the net of credits and debits for an account at the end of a reporting period. For example, a credit card balance may show the amount you owe to the company as a result of your purchases, while a bank account balance may show the amount owed to you by the bank as a result of interest earned on your money.

Accounts Reconciliation: The beginning balance plus the sum of all entries on a ledger or in a checkbook register must equal the ending balance on an account statement. Deposits, interest received, and credits are added to the beginning balance. From this total amount, automatic withdrawals, checks outstanding, checks negotiated, and account charges are subtracted. When the resulting balance equals the ending balance on the account statement, the account is reconciled.

Active-Participant Status: This term applies to a person, or his or her spouse, who participates in an employer-sponsored retirement plan. The plans that qualify include the following: 1) a qualified pension, stock bonus, or profit sharing plan; 2) a qualified annuity plan; 3) a tax-sheltered annuity (TSA) plan; 4) a simplified employee pension plan (SEP); or 5) a local, state, county, or federally sponsored retirement plan.

Actuary: Insurance contracts and retirement plans require professional calculation of payments to be received and benefits to be paid. An actuary analyzes all probability and risk estimates based upon past experiences to confirm obligations are pragmatic and attainable.

Adjustable Rate Mortgage (ARM): Also called a variable rate mortgage, this mortgage has an interest rate that is adjusted periodically, usually at intervals of one, three, or five years, based on a measure or an index, such as the rate on US Treasury bills or the average national mortgage rate. In exchange for assuming some of the risk of a rise in interest rates, a borrower receives a lower rate at the beginning of an ARM than if he or she had taken out a fixed-rate mortgage.

Adjusted Gross Income (AGI): On a federal income tax return, AGI is the amount of income subject to federal income taxes. To determine AGI, subtract certain qualified deductions, such as unreimbursed business expenses or contributions to a traditional Individual Retirement Account (IRA), from gross income, which generally includes employment income, interest income, dividends, and capital gains. Advance: A services company may establish a salary advance to assist new employees with initial cash flow problems or to help seasoned employees with emergency needs. The advance represents money received before it is actually earned. In addition, some businesses will establish an employee cash advance program to provide for business-related travel expenses.

Aggressive Growth Fund: This mutual fund has the objective of maximizing long-term capital growth, rather than dividend income, by investing in narrow market segments and small company stocks. Aggressive growth funds are designed for maximum capital appreciation and generally invest in companies with high growth rates.

Allocation Formula: Employers' contributions to employee profit sharing plans are allocated to participants' accounts based on an allocation formula. The formula also governs the reallocation of funds forfeited by employees who terminate from the plan.

Alternative Minimum Tax (AMT):
This tax calculation adds certain tax preference items back into adjusted gross income in order to prevent taxpayers from escaping their fair share of tax liability by taking numerous tax breaks. If AMT liability is greater than regular tax liability, the taxpayer generally needs to pay the regular tax and the amount by which AMT exceeds regular tax.

American Stock Exchange (AMEX): Located in downtown Manhattan, AMEX has the third highest volume of trading of any stock exchange in the U.S. The bulk of trading on the AMEX consists of index options and shares of small to medium-sized companies.

Amortization: This process brings gradual extinction to a debt, loan, or mortgage over a specific span of time. It can also be used to deduct capital expenses over a period of time. Similar to depreciation, it is a method of measuring the consumption of the value of long-term assets like equipment or buildings.

Annual Percentage Rate (APR):
The yearly cost of credit or a loan is expressed as a simple percentage number. This also includes any fees or additional costs associated with the agreement. The Federal Truth In Lending Act requires all consumer credit agreements and loans to disclose the APR to ensure the understanding of the real costs applicable to the transactions.

Annual Report:
This yearly statement describes company management, operations, and financial reports. Annual Reports are sent to every shareholder and are available for public review. The Securities and Exchange Commission (SEC) requires an annual report published by any corporation issuing registered stock. A more exhaustive annual compilation of data is found in Form 10-K, which the SEC mandates from companies surpassing certain qualifications.

Annuitant: The person to whom an annuity is payable is called the annuitant.

Annuity: This long-term contract sold by life insurance companies guarantees payments (based on the claims-paying ability of the issuing insurer), fixed or variable, to the purchaser at regular intervals. Fixed annuities offer consistent, predictable returns, whereas variable annuities provide fluctuating returns based on the performance of an investment portfolio. Payments are usually scheduled to begin at a future time, such as retirement, but in certain cases, payment may begin immediately. Some annuities provide tax-deferred earnings, often as part of retirement plans.

Annuity Cash Refund: The contract for an annuity offering income for life may include a death benefit for the total premiums paid. When the annuitant dies, the annuity cash refund will be the net sum of premiums paid minus the amount received in annuity payments.

Annuity Certain: This option in an annuity contract allows the annuity owner to select a future level of income covering a specified number of years, generally ten years. If the annuitant dies before the expiration of the annuity payments, the remaining obligation is transferred to the designated beneficiary in the annuity contract.

Annuity Joint and Survivor:
This annuity option provides for payments for two designated annuitants. Upon the death of the first annuitant, the surviving annuitant receives prearranged, continued payments for life, based on a percentage received by the first annuitant.

Annuity Joint Life:
While two or more individuals may be named annuitants, payments cease at the death of the first annuitant in anannuity joint life contract.

Annuity Modified Refund: In a contributory retirement plan, the annuity beneficiary of a deceased retiree receives the accumulated balance of the pension fund, which is referred to as the annuity modified refund.

Annuity Payout Option:
Payments from an annuity may be received in a variety of ways: asa fixed dollar amount, for a fixed period, or over the lifetime(s) of one or two annuitants. The annuitant chooses one of these alternatives as the payout option.

Application Fee: A lender may charge a fee to process a loan application. Paying this fee does not guarantee loan approval. Some lenders apply the cost of the application fee toward certain closing costs.

Appraisal: This assessment of a property's value, performed by a qualified professional, is based on information from recent sales of similar properties.

Asset: An asset is any property with a cash value that is expected to provide future benefit, such as real estate, equipment, savings, and investments.

Asset Allocation: This process divides investments among different asset classes, such as stocks, bonds, and cash. The goal of asset allocation is to reduce portfolio risk through diversification.

Asset Class: An asset class is a specific category of assets or investments, such as cash, bonds, stocks, or real estate. Assets in the same category tend to share similar characteristics and behave similarly in the marketplace.

Assignment: An assignment is the legal transfer of the entire or partial ownership of an asset, such as an insurance policy, to another person or entity.

Automatic Reinvestment: This prearranged investment plan automatically deposits mutual fund dividends or capital gains back into the fund to purchase additional shares, allowing the owner to take advantage of compounding.
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This site has been published for residents of the United States. The site has been prepared for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular strategy. ChartMark Investments is a Registered Investment Advisor in the states of Oklahoma, Louisiana and Texas. If you are not a resident of one of these three states we will not be able to share investment advice and related services with you at this time. Should you desire information on ways in which our company may help you with your financial service interests please feel free to contact us. We may be able to become registered in your state or qualify for a de minimis exemption at which time we would be able to further discuss how our services may meet your needs.



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