Articles Index

Rating Agency

A rating agency is a company that has been given special authority from the government to rate securities such as stocks and bonds, based on risk and pricing. The higher the rating, the lower the risk of default, which generally means a lower interest rate for the the company issuing the stock or bond. Companies that receive high credit ratings from the rating agencies have lower costs of funding and capital.

Purchasing Managers Index

The Purchasing Managers Index is released on the first day of the month by the National Association of Purchasing Managers. The PMI measures five factors in business: new orders, inventory levels, production, supplier delivers, and employment conditions. Each of these five factors are adjusted and weighed according to time of year and other events.

New York Stock Exchange

Located on Wall Street in New York City, the New York Stock Exchange, or NYSE, is the oldest and largest in the world. It generally tends to control policy due to its sheer size and is where most major U.S. Blue Chip companies trade. The New York Stock Exchange is also referred to as the Big Board.

Employment Situation Report

The Employment Situation Report is an economic indicator that is released on the first Friday of every month at 8:30 a.m., EST. Published by the Bureau of Labor and Statistics, the report has two main components. The Employment Situation Report is used to help determine the "tightness" of the labor market.

Employee Cost Index - ECI

The Employee Cost Index (or ECI for short), is a measurement of the growth of overall compensation, including wages and benefits, for employees across the country. It is based on a fixed number of occupations and is released by the Department of Labor.

Consumer Price Index

The consumer price index is one of the most important benchmarks and economic indicators because it measures the prices of goods and services for the consumer. The consumer price index is published monthly by the U.S. Department of Labor and measures inflation. The CPI tracks price changes from the consumer's perspective, whereas the PPI measures it from the seller's / manufacturer's perspective.

Consumer Confidence Index

The consumer confidence index, which is often shorthanded as CCI, is an economic indicator that measures consumer confidence in the United States economy. The U.S. has been far more dependent upon the spending pattern of its citizens than other industrialized nations, making it much more important than a comparable figure would be in nations such as Japan or Germany.

Retail Sales Data

Retail Sales are the backbone of our economy. The Retail Sales Data released monthly by the Census Bureau measures the merchandise sold by companies. It includes all retail operations in the nation through a sampling method, from Wal-Mart to the local bookstore.

PPI (Producer Price Index)

The Producer Price Index (or PPI for short) is a group of indices that measures the average change over a span of time of the price received by domestic producers of goods and services. Whereas the CPI measures price changes from the consumer's perspective, the PPI measures it from the Sellers / Manufacturer's perspective.

Housing Starts

A key economic indicator, Housing Starts measure the number of new residential construction projects begun during a specific span or period of time.

Gross National Product (GNP)

The Gross National Product (or GNP) is comprised of taking the Gross Domestic Product (GNP) and adding it to the income of domestic residents resulting from foreign investments subtracted by the earned income in domestic markets by foreigners.

Bankrupt

When a person or company cannot pay back its liabilities and debt. In a publicly traded corporation, assets are transferred from shareholders to bondholders and various other creditors.

Annuity

A contract available from an insurance company which guarantees specific payments at certain times (such as retirement). There are several different types of annuities, but the two most common are fixed and variable. Fixed annuities guarantee a payment for a certain amount of money. Variable annuities carry no such guarantee but have a greater potential for appreciation.

SEC (Securities and Exchange Commission)

The Securities and Exchange Commission (normally called the SEC for short), is the chief regulating body in the securities industry. Its primary function is to protect investors by preventing and prosecuting fraud, insider trading, and other deceptive and fraudulent practices in the stock market.

Pacific Stock Exchange

The Pacific Stock Exchange is a regional exchange found in San Francisco and Los Angeles. It is the only exchange in the United States open between 4:00 and 4:30 p.m.

Partnership Agreement

A Partnership Agreement is a written contract among partners that spells out the exact terms and conditions of the partnership.

Partnership

A partnership is type of unincorporated business structure in which individuals or entities called "partners" are entitled to a percentage of the profits. There are two types of partnerships including the general partnership and limited partnership.

Partner

A partner is any individual who is part of a partnership. There are generally two types of partners, "General" and "Limited".

Participation Rate

The Participation Rate is the percentage of the general population (over the age of 15) who are currently employed or are actively seeking employment.

Parabolic Indicator

The Parabolic Indicator was developed by J. Wells Wilder in order to determine the best times to get in and out of the market. It is based on SAR (the stop and reverse method).

Paired Shares

Paired Shares refer to the stock of two separate companies that are under the management / supervision of a single firm that is sold as one unit. Also known as Siamese Shares.

Limited Partnership

A partnership that includes one or more partners with limited liability in regards to the dealings of the partnership.

Deflation

Deflation is a decline in overall prices in the economy due to a contraction of either credit or the amount of money that is available. It is the opposite of inflation.

Corporation

A corporation is a legal entity chartered by the State and seperate from its owners. A corporation can issue shares of stock and take on debt.

Adjusted Basis

A tool used to calculate the gain or loss when a security or asset is sold. It reflects any improvement or adverse event the investment may have been subject to.