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Data Tagging

Data tagging, in formats like XBRL or “eXtensible Business Reporting Language,” is gaining popularity as a way to enhance financial reporting. By using computer codes to "tag" different kinds of…

Day Order

Unless an investor specifies a time frame for the expiration of an order, orders to buy and sell a stock are “Day” orders, meaning they are good only during that trading day.  Day orders that do…

Day Trade

FINRA rules define a “day trade” as the purchase and sale, or the sale and purchase, of the same security on the same day in a margin account.  This definition encompasses any security,…

Day Trading

Day traders rapidly buy, sell and short-sell stocks throughout the day in the hope that the stocks continue climbing or falling in value for the seconds or minutes they hold the shares, allowing them…

Debentures

An unsecured bond backed solely by the general credit of a company.

Default

A failure by an issuer to pay principal or interest when due, or to fulfill other obligations, such as reporting requirements.

Deferred Annuity

With a deferred annuity, you make payments to an insurance company, which will be free from taxes until you reach a particular age or a date specified in your contact.

Deferred Sales Charge

A sales charge, also known as a "Back-end Load," investors pay when they redeem (sell) mutual fund shares. Funds generally use these to compensate brokers.

Defined Benefit Plan

Defined benefit plans also are known as pension plans. Employers sponsor defined benefit plans and promise the plan's investments will provide you with a specified monthly benefit at retirement.…

Defined Contribution Plan

A retirement savings plan, such as a 401(k) plan, that does not promise a specific payment upon retirement. In these plans, the employee or the employer (or both) contribute to the employee's…

Derivatives

Financial instruments whose performance is derived, at least in part, from the performance of an underlying asset, security or index. For example, a stock option is a derivative because its value…

Direct Investment Plans: Buying Stock Directly from the Company

Many companies allow you to buy or sell shares directly through a direct stock plan (DSP).  You can also have the cash dividends you receive from the company automatically reinvested into more…

Disaster-related Investment Scams

Natural disasters such as wildfires, floods and hurricanes often give rise to investment scams.  These scams can take many forms, including promoters touting companies purportedly involved in…

Disclosure

Information about a company’s financial condition and business that it makes public. Investors can use this information to make informed investment decisions about the company’s securities. 

Discount

A bond sold before it matures might not sell at full par value. If it sells below par, it is selling at discount.

Discount Note

Short-term obligations issued at a discount from face value. Discount notes have no periodic interest payments; the investor receives the note's face value at maturity. For example, a one-year, $1,…

Distribution Fees

Fees paid out of fund assets to cover marketing and selling fund shares. These fees may cover advertising costs, compensating brokers and others who sell fund shares, payments for printing and…

Distribution [and/or Service] (12b-1) Fees

  So-called “12b-1 fees” are fees paid out of mutual fund or ETF assets to cover the costs of distribution – marketing and selling mutual fund shares – and sometimes to cover the costs of…

Diversification

Diversification is a strategy that can be neatly summed up as "Don't put all your eggs in one basket." The strategy involves spreading your money among various investments in the hope that if one…

Dividend

A portion of a company's profit paid to shareholders. Public companies that pay dividends usually do so on a fixed schedule although they can issue them at any time. Unscheduled dividend payments…

Dollar Cost Averaging

Dollar-cost averaging means investing your money in equal portions, at regular intervals, regardless of the ups and downs in the market. This investment strategy can help you manage risk by following…

DTC Chills and Freezes

Should problems arise with a company or its securities on deposit at The Depository Trust Company (DTC), DTC may impose a “chill” or a “freeze” on all the company’s securities. A “chill” is a…