Glossary | T
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Tax Deferred: Earnings from an investment that are not taxed until an investor receives it.
Tax-Exempt Bond: Securities issued by state or local government and their agencies and instrumentalities. Income is exempt from federal taxes, and possibly, some or all from state and local taxes. Also known as Municipal Bond.
Tax-Exempt Commercial Paper: Short-term tax-free debt obligations issued on behalf of corporations backed by the issuing municipality.
Tax Form 1040: Form U.S. residents use for filing federal income tax.
Tax Form 5329: Form used to report any excise or additional income tax that is owed in connection with an IRA account and annuity.
Tax Form 8606: Form investors use to report the amount of non-deductible contributions and the non-taxable part of distributions received from an IRA.
Taxable Equivalent Yields: Because of their tax-exempt status, municipals yield less than comparable taxable bonds. Even with a smaller payout, investors seeking income primarily may be better off after tax with the municipal investment, especially if they are in a high tax bracket. Taxable Equivalent Yield = Tax-exempt yield divided by 1. 0 - Combined Marginal Tax Rate. For example, if Dreyfus Municipal Bond Fund had a 30-day tax-exempt yield of 5.25%, an investor in the 28% federal tax rate bracket would need to realize a taxable yield of 7.29% in order to be equivalent to the tax-exempt yield. [No effect has been given to state and local taxes.] 0.0525 divided by (1 - 0.28) = 0.0525 divided by 0.72 = 7.29%
Technical Analysis: Technical analysts are often referred to as technicians or chartists. Chartists do not consider the fundamentals of a company; rather, they rely on studying the supply and demand for a company's stock. Chartists try to predict stock prices more for short or intermediate time periods. Chartists consider factors such as trading volume of a company's stock, historic highs and lows, closing prices of a company's stock over time and the shape of that graph, and other computer-generated charts.
Technical Research: Evaluation of the supply and demand for securities and commodities based on trading volume and price studies.
Tenants by Entirety: Form of ownership, usually between husband and wife, where the survivor takes all after the death of the other (right of survivorship) and neither party can affect lawfully the other party's interest.
Tenants in Common: Two or more persons who together own securities, each having a fractional financial interest of assets in the account with no rights of survivorship.
Tender of Certificate Shares: Preparation of certificate shares for deposit or redemption by the client, including his/her endorsement.
Tender Offer: Public announcement of intent to acquire, at a fixed price (usually higher than market price), some or all the securities of an existing company, often with the objective of taking control of the target company.
Third Market: Over-the-counter trading of listed securities by non-exchange members.
Ticker Tape: System that produces a running report of trading activity on the stock exchanges.
Time Deposit: Bank account or CD containing a pledged balance at a stated rate for a specified period of time for which a stated rate of interest is paid.
Tipping: Information passed by one person to another as a basis for buy or sell action in a security. Such information is presumed to be of material value and not available to the general public. The act of tipping can constitute a Rule 10b-5 insider trading violation on the part of both the tippor and the person receiving the tip who trades on the material non-public information.
Total Return: The annual return on an investment, including appreciation and dividends or interest. For bonds held to maturity, total return is yield to maturity.
Trade Date: Actual date a purchase or redemption order takes place.
Traditional IRA: A tax-deferred IRA that allows annual contributions of up to $2,000 for each income earner. Contributions are fully deductible for all individuals who are not active participants in employer-sponsored plans or for plan participants within certain income ranges.
Transfer Agent: Institution servicing a mutual fund company by maintaining all client records, handling all transaction processing and client mailings, and resolving shareholder inquiries.
Treasuries: See U.S. Treasury Securities, U.S. Treasury Notes, U.S. Treasury Bonds, U.S. Treasury Bills.
Treasury Stock: Corporations sometimes find it desirable to reduce the number of shares in the hands of the investing public, and they do this by buying back their own stock (treasury stock). Generally, firms repurchase stock when they view it as a worthwhile or attractive investment. Treasury stock is retained by the corporation and can be used by it for mergers and acquisitions, to meet employee stock option plans, or as a way to pay stock dividends.
Trustee: Person or organization appointed to manage the property according to the trust agreement.
Turnover Rate: Volume of shares traded in a year as a percentage of total shares outstanding for an individual or professionally managed portfolio.
Top-Down Approach: refers to an investment strategies used by portfolio managers that puts an emphasis first on the general trends of the economy and then chooses specific industries, or countries in the case of global or international funds, and then companies that can benefit from these trends.