Glossary

401(k). An employer-sponsored retirement plan that permits employees to contribute part of their pay into the plan and defer taxes on that income until withdrawn, usually at retirement. Money contributed to the plan may be partially matched by the employer, and investment earnings within the plan accumulate tax-free until they are withdrawn. The 401(k) is named for the section of the federal tax code that authorizes it.

403(b). Similar to 401(k) plans, but designed for public employees and employees of nonprofit organizations. These plans are also called tax-sheltered annuities, or TSA accounts, or tax-deferred annuities, or TDA accounts.

457. A plan similar to 401(k) and 403(b), designed for government employees.

ACCOUNT BALANCE. The total value of your retirement savings account calculated at the current market prices of the investments in your portfolio. You can find this information on your statement or often through a Voice Response System (VRS) supported by your plan provider.

ACTUARIAL. Data collected by government entities or insurance companies to determine the probability of an occurrence. The most commonly used is the life expectancy table that provides the probability of death for each age and gender combination.

ADVISOR. An individual or organization employed to select and monitor the investment of assets.

AFTER-TAX CONTRIBUTIONS. Take home pay after deducting taxes.

AFTER-TAX SAVINGS. Contributions made to a defined contribution plan after federal and state taxes are deducted from your salary. Since the amount you put in has already been taxed, your savings will not be subject to income tax when you withdraw money. Any earnings on the account will be tax deferred. Therefore when earnings are withdrawn, they are subject to taxes and possibly penalties. 401(k) plans generally allow you to make before-tax investments.

AGGRESSIVE GROWTH FUND. A mutual fund with an aggressive investment strategy.

ALPHA. A measure of investment performance taking into account a fund's risk. This measure tracks how well a fund performs based on the timing and selection of assets.

Be Aware: When comparing two investments, usually the one with the higher alpha indicates better risk-adjusted returns. The difficulty in comparing is that you need to know how the alpha for each investment was constructed. In order to do an "apples to apples" comparison, be sure the same index benchmark is used for both investments.

AMORTIZATION. The gradual elimination of a liability, such as a mortgage, in regular payments over a specified period of time. Such payments must be sufficient to cover both principal and interest. Also, writing off an intangible asset investment over the projected life of the assets.

AMOUNT INVESTED. The initial dollar amount put into an investment. For example, if you invest $2,000 and invest in a stock now worth $2,500, your amount invested is $2,000.

ANNUAL SALARY. The wages earned for a given year including any bonus, commission or other cash compensation paid by an employer.

ANNUAL CONTRIBUTION. The yearly amount you save in your 401(k), IRA, or other savings or investment plan.

ANNUITY. An annuity is a contract sold by an insurance company designed to provide equal cash payments at a specified intervals usually at retirement. Annuities are offered by insurance companies and sold by agents, banks, savings and loans, stockbrokers, and financial planners. All capital in the annuity grows tax-deferred. An early withdrawal penalty often applies. Fixed annuities work like certificates of deposit (CDs): you invest a lump sum, and the insurer guarantees a fixed rate of interest for a set term of years. Variable annuities let you direct your investment into portfolios of investment choices such as stocks, bonds, and cash equivalents. Your return depends on the performance of the portfolios you choose.

AS OF DATE. The date on which your investment was last priced at the market value. Most publicly traded investments, like mutual funds, stocks or bonds, are typically valued daily. Other investments, like real estate, may be valued annually.

ASSET. Anything of value, typically investments or property, owned by a business or individual.

ASSET ALLOCATION. The process of dividing investments among different kinds of assets, such as stocks, bonds, real estate and cash, to optimize the risk/reward tradeoff based on an individual's or institutional specific situation and goals. A key concept in financial planning and money management. The GuidedChoice experts, and many financial planners, use asset allocation to make a recommendation for reaching your retirement goals. Over 90 percent of your returns as an investor are achieved through asset allocation. The remaining percentage of your return depends on which specific asset you buy and when you buy it.

ASSET ALLOCATION FUND. A single mutual fund which attempts to accomplish the goals of asset allocation all by itself.

ASSET CATEGORY. (Same as Asset Class) An asset class typically refers to investments or securities that have similar characteristics and properties. For example, equities (stocks) and fixed income (bonds) are two major asset classes. They may be subdivided into other classes — stocks may be classified as large-cap equity or international equity; bonds may be described as short-term bonds or long-term bonds. Asset classes are used in the process of asset allocation to control the risk and return characteristics of a portfolio.

Below is a list of commonly used asset classes:

• cash
• short term fixed-income
• intermediate term fixed-income
• long term fixed-income
• large cap growth equities
• large cap value equities
• mid-cap growth equities
• mid-cap value equities
• small cap growth equities
• small cap value equities
• international fixed income
• international equity
• emerging markets equity

AUTO RESET. A feature of the GuidedChoice software that lets you reset your savings rate, retirement age, risk and retirement income settings to their initial recommended levels after running other scenarios.

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BALANCED FUND. A mutual fund that buys a combination of common stocks, preferred stocks and bonds to provide both income and capital appreciation while avoiding excessive risk.

BEAR MARKET. Any market (more typically, the U.S. stock market) in which prices are in a declining trend.

BEFORE-TAX INCOME. This is any income earned before you pay your taxes. It includes salaries, commissions, wages, tips, and self-employment income — basically, what you earn from working, as well as certain investments that are not tax-free or tax deferred earnings.

BENCHMARKS. A standard generally used for making investment performance comparisons. An index (such as the S&P 500) is an example of a benchmark.

Some commonly used benchmarks include:

• The Dow Jones Industrial Average
• Standard and Poor's 500, S&P 500
• NASDAQ

Be aware: The key to any comparison is knowing whether the comparison is valid. For instance, when you compare the performance of a mutual fund to the performance of an index, like the Standard and Poor's 500, you need to be sure the mutual fund is similar to the index. The most common measurement to determine the validity of an index as a comparison for an investment is the correlation coefficient, or r2. An r2 > .85 indicates that the benchmark is probably relevant. In order to ensure the relevance of the benchmark, you should check the r2 for different time periods.

BENEFICIARY. A person named to receive a benefit from a savings plan, insurance policy or trust. If you are married, your spouse is your primary beneficiary for any employer plans. If you want to name someone else as your primary beneficiary, say your child or parent, your spouse must sign a legal waiver of the beneficiary rights. A contingent, or secondary, beneficiary has conditions attached to the beneficiary rights. Usually it means the primary beneficiary(ies) must die first.

BETA. Measure of a stock's or mutual fund's volatility relative to an index of the market as a whole. A fund with a beta of 1.50 is 50% greater than the market's beta, which is always 1.00. Therefore, the fund is expected to perform 50% better in up markets and 50% worse in down markets. Because this statistic relates to the market index, betas are best understood by examining the correlation to the market index, as measured by r2.

Be aware: The key to using beta is understanding whether the index used is valid. You should be sure that the stock or mutual fund is similar to the index. The most common measurement to determine whether the index is appropriate for an investment is the correlation coefficient, or r2. An r2 > .85 indicates that the benchmark is probably relevant. In order to ensure the relevance of the benchmark, you should check the r2 for different time periods.

BIANNUAL. Two times per year.

BIMONTHLY. Two times per month.

BOND. A bond (or fixed income security) pays a fixed amount of interest at a regular interval over a certain period of time. Debt securities, or bonds, are loans made by investors to companies and government entities that promise to pay back the loan at a specific interest rate. When you buy a $1,000 bond, you are actually lending the company or government entity $1,000. The borrower agrees to pay back the $1,000 after a certain period of time and pays a specified rate of interest until that time. There are two types of risk associated with bonds: interest rate risk and default risk. Interest rate risk is the risk that interest rates will rise above the bond's stated interest rate. This risk is greater the longer the borrowing period — or the term of the bond. Default risk is the risk that the borrower will not be able to pay back the borrowed amount due to financial difficulties. Default risk is usually considered higher for corporations than for government entities.

Be aware: Bond prices typically move opposite of interest rates. When interest rates go up, bond values tend to go down, and visa versa. Generally, the longer the bond term — the period before the loan is paid off — the greater the impact interest rate changes will have on the price of the bond.

BOND FUND. A mutual fund that primarily invests in bonds (or fixed income securities)

BOND, GOVERNMENT. Federal and state governments offer these securities to pay for voter- or legislature-backed public works. See also bonds, municipal. Also see bond.

BOND, INTERMEDIATE TERM. These securities usually mature between one and ten years. Also see bond.

BOND, INTERNATIONAL. These securities are debt issued by foreign governments or corporations. Similar to US bond, they have interest rate risk and default risk, but they also have foreign currency risk and political risk.

BOND, INVESTMENT REAL ESTATE. These securities usually purchase debts related to property and property management. Also see bond.

BOND, LONG TERM. These securities usually mature after more than ten years. Also see bond.

BOND, MUNICIPAL. Local governments offer municipal bonds to pay for special projects such as highways or sewers. The interest that investors receive is usually exempt from some income taxes. Since municipal bonds usually have a tax favored status, and therefore pay lower interest rates, they should not be used in qualified retirement plans such as 401(k) or IRAs that already have tax benefits. Compare to bonds, government. Also see bond.

BOND, SHORT TERM. These securities usually mature within one to three years. Also see bond.

BONUSES. Wages received, usually in a lump sum, in addition to regular salary or compensation.

BROKER. An individual or firm which acts as an intermediary between a buyer and seller usually charging a commission. For securities and most other products a license is required.

BULL MARKET. Any market where prices are in an upward trend.

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CAPITAL. Cash or goods used to generate income. Also the net worth of a business, including facilities and equipment, inventories, cash, and receivables.

CAPITAL APPRECIATION. The gain in value of an asset since its purchase. For example, if you buy your home for $100,000 and it is now worth $150,000, you have capital appreciation of $50,000.

CAPITAL GAIN/LOSS. The difference between an asset's purchase price and selling price. The difference is called a capital gain if it is a positive amount, and capital loss if it is a negative amount. For example if you purchase a stock at $25 and you sell it a year later for $20, you have a $5 capital loss. Likewise if you invest in a mutual fund at $30 and later sell the share for $40, you have a $10 capital gain.

CASH. In an investment portfolio, "cash" means highly liquid, safe investments that can be easily changed into cash, such as Treasury bills, money market accounts, certificates of deposit (CDs) or even short-term bond funds. These types of investments typically have low volatility or investment risk and low return.

CASH BALANCE PLAN. A defined benefit plan that looks like a defined contribution plan. Like a defined benefit, the original plan design contemplated providing a target benefit equal to a percentage of compensation. However, annual reporting to employees is the same as a defined contribution plan — employees receive statements showing an account balance that has grown by reason of employer contributions and investment earnings. An employee's account balance is also portable. That is, the employee can roll over the account balance to an IRA upon termination, or take a lump sum payment upon retirement in lieu of the normal annuity form of payment. As a defined benefit plan, the cash balance plan requires an annual actuarial valuation, and payment of pension guaranty premiums.

CASH EQUIVALENTS. In an investment portfolio, "cash" means highly liquid, safe investments that can be easily changed into cash, such as Treasury bills, money market accounts, certificates of deposit (CDs) or even short-term bond funds. These types of investments typically have low volatility or investment risk and low return.

CASH FLOWS. A measure of a company's financial health. Equals cash receipts minus cash payments over a given period of time; or equivalently, net profit plus amounts taken out for depreciation, depletion, and amortization.

CASH-LIKE. Highly liquid, very safe investments which can be easily converted into cash, such as Treasury Bills and money market funds.

CASH MANAGED FUND. (Same as Money Market) A mutual fund investing in securities whose maturities are less than one year. These might include certificates of deposit, commercial paper, banker's acceptances, Treasury bills, and discount notes of the Federal Home Loan Bank and the Federal National Mortgage Association, among others. Elements of the money market have two things in common: safety and accessibility. Only those administered by banks are FDIC insured, but some others are privately insured. The fund's net asset value (NAV) remains a constant $1 per share to simplify accounting but the interest rate does fluctuate.

CERTIFICATE OF DEPOSIT. A CD is a short or medium-term, interest-bearing FDIC insured debt instrument offered by banks. CDs guarantee a specified rate of return for a specified term. It is generally considered a cash equivalent instrument.

COLLEGE EXPENSES. (Public vs. Private) GuidedChoice will calculate the average cost of your child's college expenses for you. All you need to do is enter your child's age and whether he or she will be attending public or private school.

COLLECTIBLES. Investors sometimes include rare items, such as art, jewelry and coins, they collect in the total value of their assets. However, the value of collectibles is difficult to calculate because they are not easy to sell immediately. Investors also often overvalue the worth of their collections and underestimate the volatility, or the change in value.

If you want to include any collectibles in your retirement planning, you will need to have valuations done and provide GuidedChoice with the values annually. If you do not provide regular valuations on the collectibles, GuidedChoice will need to treat the asset like cash. This will most probably understate both earnings and volatility, adversely affecting your advice. If you do not include your collectibles, GuidedChoice may understate your monthly income at retirement. The latter would be a more conservative approach and thus the one recommended by GuidedChoice.

COMMISSIONS. A fee charged by a broker or agent for his or her service in facilitating a transaction such as the buying or selling of securities or real estate.

COMMODITY. A physical substance, such as food, grains, and metals, which is interchangeable with other product of the same type, and which investors buy or sell. Or more generally, a product which trades on a commodity exchange; this would also include foreign currencies and financial instruments and indexes.

COMMON STOCK. These securities represent partial ownership of a corporation. Owning shares of common stock gives the holder a share in a company's profits through dividend payments or the capital appreciation of the security. Stock also allows an investor to vote on such matters as the election of company directors.

COMPANY MATCH. See employer match. The percentage your company will contribute to your 401(k), 403(b) or 457 plan based on an individuals contribution. For example, an employer might match 50 cents for every dollar you contribute. This matching may be capped at a certain percentage, such as 5% of your salary.

COMPANY STOCK. See Common Stock.

COMPOUNDING. When interest is earned on the interest as well as the principal amount. For example, if your investments make 10% a year for five years, you earn not 50% but 61.1%. Here's the reason: as time goes on, you make money not only on your original investment but also on your accumulated gains from earlier years.

CONSUMER PRICE INDEX (CPI). An inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food, and transportation. The CPI is published monthly. also called cost-of-living index. see also Producer Price Index.

CONTINGENT BENEFICIARY. A person named to receive a benefit from a savings plan, insurance policy or trust. A contingent, or secondary, beneficiary has conditions attached to the beneficiary rights. Usually it means the primary beneficiary(ies) must die first. You can have multiple secondary beneficiaries receiving different amounts of the benefit if you die. The total of all secondary beneficiaries must equal 100%.

CONVERTIBLE SECURITY. Bond or preferred stock that is exchangeable at the option of the holder for common stock of the issuing corporation.

CORRELATION. A relationship between two variables.

CORRELATION COEFFICIENT (r2 ). Measures how closely a portfolio's performance correlates with the performance of a benchmark, such as the S&P 500, and thus measures what portion of performance can be explained by the overall market or index performance and what portion is derived from the active management of the portfolio. It will range between 0 and 1 where 0 indicates no correlation and 1 indicates perfect correlation. It is used to determine if the benchmark is reasonable to use as a comparison or to compare two investments to each other for purposes of diversification. Highly positive correlations (near 1) indicate a direct, positive relationship. That means both investments or investment types are similar. When selecting a benchmark for an investment, you want a highly positive correlation, for example r2 > .85. Negative correlations (near minus 1) indicate an inverse relationship between the investment or investment type. That means when one goes up, the other goes down. You want to find negatively correlated investment when putting together your investment portfolio. That way, you always have assets that are earning positive returns. The object of diversification is to choose assets that are not too highly correlated with one and another. Correlation coefficients near zero mean that the investment or investment type has little sensitivity to the movement of another.

COST BASIS. How much you paid for an investment when you originally purchased it is the cost basis. This information is usually available on the statement you receive from your investment provider. For example, if you invest in a mutual fund at $35 per share, that is your cost basis whether it is currently worth $40 or $30 per share.

Be Aware: If you are investing regularly, you will have different cost basis for each purchase period. For example if you invest $100 at $25 per share in month one and then invest $100 at $30 per share in month two, your cost basis is as follows:
   4 shares at $25
   3.33 shares at $30
The cost basis for each share is important when the investment is either in a taxable account or an after-tax account. GuidedChoice needs the information to best be able to calculate your future tax liability.

CURRENT ANNUAL INCOME. How much money you earn in a year before taxes. This includes bonuses and commissions, but not interest from investments that you reinvest in savings or retirement plans.

CURRENT PORTFOLIO. The total collection of stocks, bonds, mutual funds and other investments you currently hold.

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DEBT. A liability or obligation in the form of bonds, loan notes, or mortgages, owed to another person or persons and required to be paid by a specified date (maturity).

DEDUCTIBLE IRA. Note: IRA = Individual Retirement Account. An IRA into which an individual contributes up to $3,000(plus a $500 catch-up contribution for certain individuals aged 50 or over for 2004) annually that is deducted from taxable income. The earnings also accumulate tax deferred.

DEFINED BENEFIT PLANS. A qualified retirement plan set up by a corporation, labor union, government or other organization for its employees in which the sponsor agrees to make specified dollar payments to qualifying employees at retirement. Compare to defined contribution plan.

DEFINED CONTRIBUTION PLANS. A tax-deferred retirement plan, such as a 401(k) or profit sharing plan, that provides a seperate retirement account for each person covered by the plan. An employer, who may also agree to contribute certain amounts into the account such as a 401(k) match, must sponser the plan. Future benefits are based solely on amounts contributed to the plan and the investment relating to the growth of those contributions. Compare to defined benefit plan.

DEPRECIATION. A fixed asset's depreciable life is the commonly accepted period of time during which it is useful. Depreciation is an accounting procedure, which spreads the asset's purchase cost over its useful life. For example, a fixed asset that cost $10,000 and lasted 10 years could be depreciated by $1,000 a year for 10 years. For accounting purposes, this reduces its value by $1,000 each year, until at the end of its "useful life" it is worth nothing. Depreciation reduces taxable income but does not reduce cash.

DIVERSIFICATION. A portfolio strategy designed to reduce exposure to risk by combining a variety of investments such as stocks, bonds and real estate which are unlikely to move in the same direction. Holding several classes of investments tends to reduce your overall risk, although it does not protect against a loss. The way in which you diversify your portfolio can affect its rate of return. Also see asset allocation and correlation coefficient.

DIVERSIFIED PORTFOLIO. A portfolio designed to reduce exposure to risk by combining a variety of investments such as stocks, bonds and real estate which are unlikely to move in the same direction. Holding several classes of investments tends to reduce your overall risk, although it does not protect against a loss. The way in which you diversify your portfolio can affect its rate of return. Also see asset allocation and correlation coefficient.

DIVIDEND. A share of company earnings paid out to stockholders for a specific period of time. Dividends are declared by the board of directors and paid quarterly. Most are paid as cash and often times can be reinvested to purchase additional shares of stock, but they are sometimes paid in the form of additional shares of stock. Since a mutual fund is actually an investment company, they may also pay dividends.

DOW JONES INDUSTRIAL AVERAGE. This average, often called "the Dow," is the most frequently quoted market index by the press. It is a weighted average of the price of 30 widely-traded blue chip stocks such as Coca-Cola and IBM. The closing prices of these 30 stocks are added and then divided by a factor that accounts for stock splits and other market changes. The number refers to points, not dollars. Because these stocks are in a variety of sectors and are actively traded, they are considered a good reflection — but not the only reflection — of the market overall.

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EARNINGS. Revenues minus cost of sales, operating expenses, and taxes, over a given period of time. The reason corporations exist, and often the single most important determinant of a stock's price. Also called income.

ELIGIBLE COMPENSATION. The amount of your pay that's qualified to be included in a savings plan, based on your specific plan's rules.

EFFICIENT FRONTIER. The Efficient Frontier consists of a curve made up of points representing portfolios. The curve begins with the most conservative portfolio and ends with the highest returning portfolio, given no constraints. These portfolios are "efficient" meaning they provide the greatest expected return for a given level of risk. GuidedChoice seeks to recommend portfolios that fall along the Efficient Frontier. This is done through asset allocation.

ELIGIBLE SALARY. The amount of your pay that's qualified to be included in a savings plan, based on your specific plan's rules.

EMERGING MARKETS. The financial markets of developing countries, usually a small market with a short operating history. Funds that invest in emerging markets can involve a high degree of risk.

EMERGING MARKETS EQUITY. Ownership, typically in the form of common stock, in companies in developing countries. Generally these investments involve a high degree of risk, including company, market, foreign currency and political risks.

EMPLOYER MATCH. The percentage your company will contribute to your 401(k), 403(b) or 457 plan based on an individuals contribution. For example, an employer might match 50 cents for every dollar you contribute. This matching may be capped at a certain percentage, such as 5% of your salary.

ERISA (Employment Retirement Income Security Act). The 1974 federal law which established legal guidelines for private pension plan administration and investment practices.

EQUITIES. Ownership in a corporation in the form of common stock or preferred stock. Equity also refers to the total assets minus total liabilities (amount owed); called shareholders equity, net worth or book value. Also, the value of a property minus the owner's outstanding mortgage balance.

EXCHANGE. Any organization, association or group which provides or maintains a marketplace where securities, options, futures, or commodities can be traded; or the marketplace itself (for example: NYSE, AMEX, NASDAQ, Chicago Board Options).

EXERCISE. To implement the rights of an option, by buying or selling the underlying asset.

EXPECTED MONTHLY INCOME. GuidedChoice uses this term in reference to your defined benefit pension plan benefits. This is the amount of monthly income you expect to receive at retirement from the employer's pension plan. If you do not know the amount, you should contact the employer.

EXPECTED RETURN. The return expected for an asset based on a probability distribution for the possible rates of return. A probability distribution is a mathematical average of all possible outcomes, and the expected rate is the mean (average).

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FIDUCIARY. According to ERISA, any person who exercises any discretionary authority or control over the management of a pension plan or its assets, who is paid to give investment advice regarding plan assets or has any discretionary authority or responsibility in the administration of a plan. Fiduciaries are required by law to manage plans in the participant's best interests.

FICA. The Federal Insurance Contributions Act is a federal law requiring employers to withhold Social Security and Medicare tax from your wages or salary. Employers are also required to pay a portion of these taxes.

FIXED ANNUITY. An investment vehicle offered by an insurance company, that guarantees a stream of fixed payments over the life of the annuity. The insurer, not the insured, takes the investment risk. Also called a fixed dollar annuity.

FUND OF FUNDS. (Same as Asset Allocation Fund) A single mutual fund which attempts to accomplish the goals of asset allocation all by itself.

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GIC. Guaranteed Investment Contract. A contract issued by an insurance company that has a stated fixed rate of interest the insurance company promises to pay. The "guarantee" to pay the interest is only as strong as the insurance company issuing the contract. See stable value fund.

GROWTH AND INCOME FUND. A mutual fund that invests to provide both growth and income by investing in companies which have potential earnings growth and dividends. Growth and income funds are usually less risky than growth funds, but have the potential to earn more than income funds.

GROWTH FUND. A mutual fund that invests in growth stocks. Investors who want high capital appreciation tend to invest in growth funds, which are less conservative than income funds. Growth stocks are usually purchased as a long-term holding, with the expectation that they will appreciate in price per share (and perhaps pay dividends) in the future.

GROWTH EQUITY INVESTING. A strategy that seeks to invest in companies whose earnings and/or revenues are growing faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion. Stock of a company which is growing earnings and/or revenue faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion.

GUIDEDCHOICE. Provides investment advice to help you achieve your future financial goals. GuidedChoice creates and manages a portfolio to reach your investment goals while considering any outside investments you may have. And unlike other investment options or online investment advice technology, GuidedChoice actually handles the investment transactions for you.

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HELPLINE. A telephone help center for GuidedChoice participants. The center can deliver most services of GuidedChoice over the phone.

HIGH-YIELD BOND. High-yielding debt security, generally rated "BB" or below by Standard & Poor's Corporation, or "BA" or below by Moody's Investor Services. Very speculative and volatile, these bonds are considered a greater risk for investors than are investment-grade issues, and therefore pay higher interest rates to attract investors. Also known as "junk bonds" because of their low credit rating.

HIGHLY LIKELY. GuidedChoice calculates the probability that you'll reach your investment goal, and displays several possible outcomes for a given investment policy to show how likely you are to meet your goals. GuidedChoice calculates probability using Monte Carlo simulation, which essentially runs hundreds of "what-if" scenarios to determine what the range of future possible values for your investments might be. The "highly likely" outcome represents a 95% chance you will achieve this monthly income amount. Compare to likely.

HOME EQUITY. In real estate, equity is computed by subtracting from the property's fair market value the total of the unpaid mortgage balance and any outstanding lien or other debts against the property. Your equity increases as you pay off your mortgage or as the property appreciates in value. When the mortgage and all other debts against the property are paid in full you have 100% equity in your property. Relate to Monthly Income Goal.

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INCOME FUND. A fund investing in securities that provide current income. Typically, these funds invest in different types of bonds or possibly utility stocks that provide high dividends. You are taxed for the income fund's distributions in the year that you receive them — unless you hold the income fund in a tax-deferred account such as your 401(k) account or IRA.

INDIVIDUAL RETIREMENT ACCOUNT. (IRA) A tax-deferred retirement account for an individual that, depending on your income level and eligibility, permits investment earnings to accumulate tax-deferred until withdrawn, usually at retirement. A contribution limit applies, and penalties usually apply for withdrawals before age 59 1/2. Taxpayers whose income is below certain levels can deduct all or part of their IRA contributions. See also Deductible IRA, Non-Deductible IRA and Roth IRA.

INDUSTRY. A basic category of business activity.

INFLATION. Inflation is a rise in the price of goods and services as measured by the Consumer Price Index (CPI) and the Producer Price Index (PPI). Inflation occurs when spending increases and supplies decrease. Moderate inflation is an expected result of economic growth. GuidedChoice takes into account different inflation rates for college expenses, salary increases, and pension benefit increases.

INFLATION RISK. The possibility that the value of assets or income will decrease as inflation shrinks the purchasing power of a currency.

INSURANCE. A promise of compensation for specific potential future losses in exchange for a periodic payment.

INTEREST. The price paid to investors for the use of money. Companies, governments, and municipalities sell investments — such as bonds — so they can use your money. The issuer must pay you back the original amount and any interest due when you withdraw your money or your investment matures.

INTERMEDIATE-TERM BOND. These securities usually mature between one and ten years. Also see bond.

INTERNATIONAL BOND. These securities are debt issued by foreign governments or corporations. Similar to US bonds, they have interest rate risk and default risk, but they also have foreign currency risk and political risk.

INTERNATIONAL EQUITY. Securities, usually common stock, offered by companies outside the United States. In addition to company and market risk, they have foreign currency and political risk.

INVESTMENT BALANCES. The current amount of money accumulated in an investment. This amount can usually be found on your recent statement. It is calculated by multiplying the number of shares by the current share price.

INVESTMENT TIME HORIZON. The length of time between when you invest money and when you intend to begin spending it. For retirement planning purposes, your investment time horizon is from the point when you begin saving to the day you retire.

INVESTMENT TYPES. There are various types of assets one can purchase. GuidedChoice accounts for the following categories of investments:

• Cash-like
• Guaranteed Investment Contracts, GICs
• Stable Value Fund
• Certificates of Deposit, CD
• Fixed annuity
• Bond
• Short-term bond
• Intermediate-term bond
• Long-term bond
• Company Stock
• Mutual Fund
• Money Market
• Bond Fund
• Balance Fund
• Stock Fund
• Asset Allocation Fund
• Other
• Real Estate
• Privately-Held Stock
• Precious Metals
• Collectibles

INVESTMENTS. Anything of value purchased for income or capital appreciation.

INVESTMENTS, LONG-TERM. Investments intended to be held for more than generally five years. Even if you are less than five years away from retirement, some of your investments may be in long-term retirement investments. This is necessary because most likely, you will be retired for 25 years or more. Also see long term.

INVESTMENTS, SHORT-TERM. Investments intended to be held for less than five years. Short-term investments usually have less risk than long-term investments. However, they also usually have less potential to earn interest. Also see short term.

IRA. (Individual Retirement Account) A tax-deferred retirement account for an individual that, depending on your income level and eligibility, permits investment earnings to accumulate tax-deferred until withdrawn, usually at retirement. A contribution limit applies, and penalties usually apply for withdrawals before age 59-1/2. Taxpayers whose income is below certain levels can deduct all or part of their IRA contributions. See also Deductible IRA, Non-Deductible IRA and Roth IRA.

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KEOGH. A Keogh plan is a qualified, tax-deferred retirement plan for individuals who are either self-employed or self-employed partners. The account can be set up as a profit-sharing or money purchase plan. A Money Purchase Keogh plan requires a defined annual contribution, while contributions to a Profit Sharing Keogh plan are discretionary.

KEEP SOME OTHER INVESTMENTS. During the GuidedChoice process you have the ability to keep some of your existing assets. These investments will be maintained separately when GuidedChoice creates the portfolio that best meets your investment policy.

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LARGE CAP GROWTH. Asset class which includes stock of companies with strong earnings and/or revenue growth or growth potential and a market capitalization greater than $1 billion. Growth investors want to invest in stock of companies that are growing their earnings and/or revenue faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion.

LARGE CAP STOCKS. Shares of stock in companies with more than $1.5 billion in market capitalization.

LARGE CAP VALUE. Asset class which includes stock of companies with low price/earnings ratios (P/E), high dividend yields and high book/price ratios and a market capitalization greater than $1 billion. Value investors favors good stocks at great prices over great stocks at good prices.

LIABILITY. A financial obligation, debt, claim, or potential loss.

LIQUID. Easily convertible to cash.

LIQUIDITY. The ability to quickly convert an investment into cash without suffering a noticeable loss in value. Cash and Cash Equivalent investments, like stocks and bonds, are considered highly liquid. Real estate and limited partnerships have much less liquidity.

LIKELY. GuidedChoice calculates the probability that you'll reach your investment goal, and displays several possible outcomes for a given investment policy to show how likely you are to meet your goals. The outcome is "likely" if your chance of achieving your goal represents 66% probability that you will have this monthly income at retirement. Although this is the outcome that the experts have chosen to use as the target for achieving your goal, it is less probable than a "highly likely" outcome.

LONG TERM. Usually considered a time frame of five years or more. Compare to short term.

LONG TERM BOND. These securities usually mature after more than ten years. Also see bond.

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MARKET. An institution or population of buyers and sellers of investments. Often used to mean the U.S. stock market overall.

MARKET CAPITALIZATION. The total number of a company's shares multiplied by the current price per share. For example, if a company has 50 million shares, and the current price per share is $10, then the company's market capitalization is $500 million ($10 x 50 million). When investors refer to small cap, mid cap, or large cap stocks, they're referring to the amount of the stocks' market capitalization.

MARKET CONDITIONS. How well or poorly investment prices in a market are performing.

MARKET INDEX. A market index is a statistical composite of representative stocks. The Dow Jones Industrial Average, the Standard & Poor's 500, and the NASDAQ Composite are the three most widely quoted market indexes.

MARKET RISK. The variations of returns caused by the alternating forces of the market going up and down. If you invest in the market, you cannot eliminate this risk.

MARKET VALUE. The highest price that a buyer would pay and the lowest price a seller would accept on a property or company. The price is determined dynamically by buyers and sellers in an open market.

MATCHING CONTRIBUTIONS. (Same as Employer Matching) The percentage your company will contribute to your 401(k), 403(b) or 457 plan based on an individuals contribution. For example, an employer might match 50 cents for every dollar you contribute. This matching may be capped at a certain percentage, such as 5% of your salary.

MATURITY. The date when a debt obligation, such as a bond, becomes due for payment.

MID CAP GROWTH. Asset class which includes stock of companies with strong earnings and/or revenue growth or growth potential and a market capitalization between $200 million and $1.5 billion. Growth investors want to invest in stock of companies that are growing their earnings and/or revenue faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion.

MID CAP STOCK. Shares of stock in companies with between $200 million and $1.5 billion in market capitalization.

MID CAP VALUE. Asset class which includes stock of companies with low price/earnings ratios (P/E), high dividend yields and high book/price ratios and a market capitalization between $200 million and $1.5 billion. Value investors favors good stocks at great prices over great stocks at good prices.

MODERN PORTFOLIO THEORY. MPT is the statistical method of analyzing investments by comparing their risk and return characteristics to each other and to established benchmarks. Elements of MPT include alpha, beta, r2 and standard deviation. Developed by Nobel Laureate Harry Markowitz, Ph.D. in 1952, MPT is the basis of current asset allocation investment practice.

MONEY MANAGER. An individual or entity who manages a portfolio of investments such as a mutual fund. Also called a portfolio manager or investment manager.

MONEY MARKET. A mutual fund investing in securities whose maturities are less than one year. These might include certificates of deposit, commercial paper, banker's acceptances, Treasury bills, and discount notes of the Federal Home Loan Bank and the Federal National Mortgage Association, among others. Elements of the money market have two things in common: safety and accessibility. Only those administered by banks are FDIC insured, but some others are privately insured. The fund's net asset value (NAV) remains a constant $1 per share to simplify accounting but the interest rate does fluctuate.

MONTE CARLO SIMULATION. A process used by GuidedChoice to project your possible retirement income levels. GuidedChoice projects hundreds of possible market scenarios and calculates the impact of those market scenarios on your projected retirement income. GuidedChoice then measures the likelihood that any one outcome would occur.

The probability of an outcome is what GuidedChoice expects the frequency of any one outcome to be after running several hundred different scenarios:

The highly likely scenario: You have a 95% chance you will have AT LEAST this income amount. So 95 times out of 100, you will have AT LEAST this income amount.

The likely scenario: You have a 66% chance you will have AT LEAST this income amount. So 66 times out of 100, you will have AT LEAST this income amount.

The least likely scenario: You have a 50% chance you will have AT LEAST this income amount. So 50 times out of 100, you will have AT LEAST this income amount.

MONTHLY INCOME GOAL. The amount of income per month that you plan to live on when you retire. Experts often recommend that this should be between 75% and 85% of your current income, adjusted for inflation.

MORTALITY RATE. How long do you plan on living? You can't know the answer, but the IRS estimates life expectancies using actuarial statistics based on sex and current age. These mortality rates figure in GuidedChoice's calculations of how much you'll need to retire.

MUNICIPAL BOND. Local governments offer municipal bonds to pay for special projects such as highways or sewers. The interest that investors receive is usually exempt from some income taxes. Since municipal bonds usually have a tax favored status, and therefore pay lower interest rates, they should not be used in qualified retirement plans such as 401(k) or IRAs that already have tax benefits. Compare to bonds, government. Also see bond.

MUTUAL FUND. An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value (NAV) which is determined at the end of every trading session.

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NASDAQ. The acronym for the National Association of Securities Dealers Automated Quotations System, a computerized price-reporting system used by brokers to track over-the-counter (OTC) securities, as well as some exchange-listed issues.

NET ASSET VALUE (NAV). The value of one share of a mutual fund. Except for money-market funds, the value of a mutual fund share usually changes daily. The net asset value comes from dividing the value of all the fund's holdings by the number of shares in the fund

NET PROFIT. Gross sales minus taxes, interest, depreciation, and other expenses. Also called net earnings or net income or bottom line.

NET WORTH. The difference between the total value of your assets and possessions (such as your home, savings accounts, and investments) and your liabilities (such as your mortgages, credit cards, and school loans) is your net worth. For a corporation, net worth is the amount by which the corporation's total assets exceed its total liabilities.

NEW YORK STOCK EXCHANGE (NYSE). This is the oldest of the stock exchanges, which are markets for the buying and selling of securities. Companies have to meet certain criteria before they are included on the NYSE.

NON-DEDUCTIBLE IRA. An IRA into which an individual contributes up to $3,000 (plus a $500 catch-up contribution for certain individuals aged 50 or over for 2004) annually that cannot be deducted from taxable income, however the earnings accumulate tax deferred.

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OPTIMAL PORTFOLIO. The efficient portfolio most preferred by a given investor because its risk/reward characteristics match the investor's needs. It is a portfolio that maximizes your preferences with respect to returns and risk.

OTHER EARNED INCOME. Usually considered to be income other than your regular paycheck. This might include earnings from outside assets, such as a rental property, as well as a second job.

OTHER INVESTMENT TYPES. Investments that do not fit into the GuidedChoice categories of investment types.

OTHER INVESTMENT NAMES. Investments that are not publicly traded.

OUTSIDE ASSETS. For purposes of GuidedChoice assets you hold that you do not intend to use as retirement savings.

OVER THE COUNTER (OTC). A security which is not traded on an exchange, usually due to an inability to meet listing requirements. For such securities, broker/dealers negotiate directly with one another over computer networks and by phone, and their activities are monitored by the NASD. Also called unlisted. Also, the computer and phone system through which over the counter (as well as listed) securities are traded.

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PENSION PLANS. A qualified retirement plan offered by and paid for by some employers that pays a defined amount each year during retirement. The Pension Benefit Guaranty Corporation insures the money in U.S. pension plans. Investments in 401(k)s are not pensions. See defined benefit.

PORTFOLIO. A collection of investments all owned by the same individual or organization.

PORTFOLIO OPTIMIZATION. The efficient portfolio most preferred by a given investor because its risk/reward characteristics match the investor's needs. It is a portfolio that maximizes your preferences with respect to returns and risk.

PRE-TAX SAVINGS. Savings before taxes have been deducted.

PRECIOUS METALS. Gold, silver, platinum, and palladium.

PRIMARY BENEFICIARY. A person named to receive a benefit from a savings plan, insurance policy or trust. If you are married, your spouse is your primary beneficiary for any employer plans. If you want to name someone else as your primary beneficiary, say your child or parent, your spouse must sign a legal waiver of the beneficiary rights. You can have multiple primary beneficiaries receiving different amounts of the benefit if you die. The total of all primary beneficiaries must equal 100%.

PRINCIPAL. The original amount of money you invest. Also, the amount borrowed or part of the amount borrowed which remains unpaid (excluding interest). A main party to a transaction acting as either buyer or seller. The role of a broker/dealer plays when buying/selling securities for its own account. An important company executive.

PRIVATELY HELD COMPANY. Companies not traded on any stock exchange or the public market.

PRIVATELY HELD INVESTMENT. Personal or restricted, as opposed to public, not publicly held, as in a corporation: a company whose shares are not traded on the open market.

PRIVATELY HELD STOCK. Stock in a company whose shares are not traded on the open market. opposite of public company.

PROBABILITY DISTRIBUTION. A curve that shows all the values that the random variable can take and the likelihood that each will occur.

PRODUCER PRICE INDEX (PPI). An inflationary indicator published by the U.S. Bureau of Labor Statistics to evaluate wholesale price levels in the economy. See also Consumer Price Index.

PROFIT SHARING PLAN. A program in which a company shares a portion of its profits with some or all of its employees. The compensation can be stocks, bonds or cash and can be deferred until retirement.

PROSPECTUS. The document that describes a securities offering or the operations of a mutual fund, a limited partnership or other investment. The prospectus discloses financial data about the company, the background of its officers and other information needed by investors to make an informed decision.

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QUALIFIED DOMESTIC RELATIONS ORDER (QDRO). A domestic relations order that creates or recognizes the right of someone other than a participant, usually an ex-spouse, to receive all or part of the participant's benefits under a pension plan.

QUALIFIED RETIREMENT PLAN. A plan that meets the requirements of Internal Revenue Code Section 401(a) and is thus eligible for favorable tax treatment. opposite of non-qualified retirement plan.

QUARTER. A block of three months in a given year. For instance, the first quarter of a calendar year is January through March.

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r2 or R-SQUARED. (Same as Correlation Coefficient) Measures how closely a portfolio's performance correlates with the performance of a benchmark, such as the S&P 500, and thus measures what portion of performance can be explained by the overall market or index performance and what portion is derived from the active management of the portfolio. It will range between 0 and 1 where 0 indicates no correlation and 1 indicates perfect correlation. It is used to determine if the benchmark is reasonable to use as a comparison or to compare two investments to each other for purposes of diversification.

Highly positive correlations (near 1) indicate a direct, positive relationship. That means both investments or investment types are similar. When selecting a benchmark for an investment, you want a highly positive correlation, for example r2 > .85.

Negative correlations (near minus 1) indicate an inverse relationship between the investment or investment type. That means when one goes up, the other goes down. You want to find negatively correlated investment when putting together your investment portfolio. That way, you always have assets that are earning positive returns. The object of diversification is to choose assets that are not too highly correlated with one and another.

Correlation coefficients near zero mean that the investment or investment type has little sensitivity to the movement of another.

REAL ESTATE. A piece of land, including the air above it and the ground below it, and any buildings or structures on it.

REALIZED OR UNREALIZED GAINS. A gain is realized when an investment is sold for more than its cost. An investment that has increased in value, but has not yet been sold, has an "unrealized" gain.

RETIREMENT AGE. One of three main variables you control in GuidedChoice. The further away your retirement age, the longer you have to save and the fewer years you will be spending your savings.

RETIREMENT INCOME. How much money you have accumulated to pay for the period in your life during which you are no longer working.

RETIREMENT PLAN. One of several investment or saving accounts designed to stabilize or increase your income for retirement. These plans may include 401(a)s, 401(k)s, 403(b)s, 457s, SEPs, TSAs, Keoghs and IRAs.

RETIREMENT PLAN, SELF-DIRECTED ACCOUNT. Accounts in which you direct the investments — unlike some company-sponsored plans in which the company directs the investment, such as directing matching contributions into the company stock fund.

RETURN ON ASSETS. Net income divided by the total assets. This ratio measures a firm's effectiveness in using its assets to generate earnings.

RETURNS. What your money earns when it is invested. Technically, the income and change in market value for a period divided by the initial value for that period, usually expressed as a percentage. Returns in GuidedChoice assume that you reinvest all interest or dividend payments. The return calculations include both income from investments and appreciation in the price of investments.

REVENUES. Total dollar amount collected for goods and services provided.

RISK. All investments have an expected rate of return based on estimates and historical averages. Risk measures the likelihood that your investment will do better or worse than the expected rate. . Although most people focus on "down-side" risk — how much they could lose — there is such a thing as "up-side" risk, which is the chance that the investment return will be much greater than expected. The greater the difference between these two points, the greater the volatility. This is also referred to as a "risk/return" trade-off. Risk is one of three main variables you control in GuidedChoice. Investments considered to be higher risk are generally more likely to experience more volatility in the short-term. However, these investment have historically had greater returns over the long term. If an investor has a very short investment time horizon, it is usually recommended that they invest in a less risky or volatile portfolio.

ROLLOVER. Moving funds from one qualified retirement savings plan to another without incurring tax liabilities. If you receive cash from a plan, you must move it to another qualified account within 60 days or be assessed a 20% withholding tax plus a possible 10% penalty for early withdrawal. If you don't touch the money, but move it from one custodian or trustee to another, it is called a direct transfer.

ROTH IRA. A new type of IRA, established in the Taxpayer Relief Act of 1997, which allows taxpayers, subject to certain income limits, to save for retirement while allowing the savings to grow tax-free. Contributions are made after taxes, but withdrawals, subject to certain rules, are not taxed.

RULE 402(g). The annual IRS limit on 401(k) contributions. For example, in 2004 the 402(g) limit is $13,000 (plus a $3,000 catch-up conribution for certain individuals aged 50 and over).

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S&P 500. The Standard & Poor's 500 is a market-value weighted index of 500 blue chip stocks that are considered to represent the market as a whole. When investors refer to their portfolio or mutual fund "beating the S&P," they mean that their investments are earning a better return than the S&P 500 index.

SALES. Total dollar amount collected for goods and services provided.

SAVINGS RATE. One of three main variables you control in GuidedChoice; in this case, the percentage of your pay pre-tax that you contribute to your 401(k) plan.

SECONDARY BENEFICIARY. A person named to receive a benefit from a savings plan, insurance policy or trust. A contingent, or secondary, beneficiary has conditions attached to the beneficiary rights. Usually it means the primary beneficiary(ies) must die first. You can have multiple secondary beneficiaries receiving different amounts of the benefit if you die. The total of all secondary beneficiaries must equal 100%.

SECURITY. Any investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government or other organization that offers evidence of debt or equity.

SEP. Simplified employee pension — an employer-sponsored retirement plan that permits employees to invest in IRAs.

SEMIANNUAL. Twice a year.

SEMIMONTHLY. Twice a month.

SHARPE RATIO. A risk-adjusted measure of portfolio returns, using standard deviation and excess returns to determine reward per unit of risk. The higher the ratio the better the fund's historical risk adjusted performance.

SHORT TERM. Usually considered a time frame of less than five years. Compare to long term.

SHORT TERM BOND. These securities usually mature within one to three years. Also see bond.

SMALL CAP GROWTH. Asset class which includes stock of companies with strong earnings and/or revenue growth or growth potential and a market capitalization less than $200 million. Growth investors want to invest in stock of companies that are growing their earnings and/or revenue faster than its industry or the overall market. Such companies usually pay little or no dividends, preferring to use the income instead to finance further expansion.

SMALL-CAP STOCKS. Shares of stock in companies with market capitalization under $250 million.

SMALL CAP VALUE. Asset class which includes stock of companies with low price/earnings ratios (P/E), high dividend yields and high book/price ratios and a market capitalization between $200 million and $1.5 billion. Value investors favors good stocks at great prices over great stocks at good prices.

SOCIAL SECURITY. When you work, you pay taxes into the Social Security system which appear as the FICA deduction shown on your pay stub. When you retire — or if you're disabled — you, your spouse, and your dependent children receive monthly benefits based on your earnings. And, your survivors may collect benefits when you die.

STABLE VALUE FUND. Typically a pool of guaranteed investment contracts (GIC). The investment manager attempts to structure the group of contracts such that the return is maximized and the risk is minimized. Stable Value Funds generally are low risk and return investments.

STANDARD DEVIATION. A measure of the volatility of an asset. Standard deviation measures the dispersion of returns of an asset, or the extent to which possible returns can vary from the average return.

STOCK. An instrument that signifies ownership, or equity, in a corporation and represents a claim on its proportionate share in the corporations assets and profits. Mutual funds may own stocks in many companies.

STOCK FUND. A mutual funds which invests primarily in stocks.

STOCK OPTIONS. An option in which the underlier is the common stock of a corporation, giving the holder the right to buy or sell its stock, at a specified price, by a specific date. also called equity option.

SYNTHETIC GIC. A stable value fund wrapped in an insurance contract.

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TSA (TAX-SHELTERED ANNUITY). See 403(b) plan.

T-BILL or TREASURY BILL. A short-term government security, sold through the Federal Reserve Bank by competitive bidding at weekly and monthly auctions, in denominations from $10,000 to $1 million. T-bills are the most widely used of all government debt securities and are a primary instrument of Federal Reserve monetary policy. U.S. Treasury securities, including Treasury Notes and Treasury Bonds, are considered conservative investments. Treasury bills are backed by the full faith and credit of the U.S. government.

TIME HORIZON. (Same as Investment Time Horizon) The length of time between when you invest money and when you intend to begin spending it. For retirement planning purposes, your investment time horizon is from the point when you begin saving to the day you retire.

TODAY'S DOLLARS. GuidedChoice states future dollar amounts in values based on today's value. Usually future dollar amounts would be much higher if they are stated with inflation taken into account. If you're asked to enter a dollar amount, don't worry about adjusting the value for inflation because GuidedChoice does it automatically if it is necessary. Essentially GuidedChoice will increase the dollar amounts for inflation and then use a present value math equation to state those amounts in today's dollars.

TODAY'S VALUE. (Same as Market Value) The highest price that a buyer would pay and the lowest price a seller would accept on a property or company. The price is determined dynamically by buyers and sellers in an open market.

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UNDERLIER. A security or commodity which is subject to delivery upon exercise of an option contract or convertible security.

UNEARNED INCOME. An individual's income derived from sources other than employment, such as interest and dividends from investments, or income from rental property. Also called unearned revenue. Opposite of earned income.

UNLIKELY (or LEAST LIKELY). GuidedChoice calculates the probability that you'll reach your investment goal, and displays several possible outcomes for a given investment policy to show how likely you are to meet your goals. The "unlikely" or "least likely" outcome represents a only a 50% chance you will achieve this monthly income amount. Compare to likely and highly likely.

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VALUE EQUITY INVESTING. An investment style which favors good stocks at great prices over great stocks at good prices. Utilizes such valuation measures as price to book ratio, price/earnings ratio, and yield.

VESTING. An ERISA guideline stipulating that employees must be entitled to their benefits within a certain period of time. The vesting period is the time before your shares are are owned unconditionally. When an employee is fully vested they have the rights of ownership.

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W-2. An IRS form that employers issue to you, the IRS and the Social Security Administration, which reports your taxable wages and the taxes withheld by the employer.

W-4. And IRS form that allows an employer to determine how much federal income tax to withhold from your wages. You complete the form when you're hired or want to change your withholding allowances.

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YIELD. The annual rate of return on an investment, expressed as a percentage. For bonds and notes, it is the coupon rate divided by the market price. For securities it is the annual dividends divided by the purchase price.