Margin

Borrowed money that is used to purchase a security, a practice that is often referred to as “buying on margin.” This is a risky practice since the borrower must repay the loan, with interest, regardless of how much is made—or lost—on the security purchase.

Mezzanine Investing

Refers to investments in the layers of capital between senior debt and common or preferred equity and typically combines elements of both debt and equity. Mezzanine investments often combine a high yielding debt security with an option or warrant on the company’s equity to provide additional upside opportunity.

Mortgage-Backed Securities (MBS)

Investments that are secured by pool of mortgages created by a bank, builder or government agency. Investors that buy MBS shares provide the assets needed to fund those mortgages in return for a proportionate share of the principal and interest payments on the loans.

Municipal Bonds

Municipal bonds are fixed income investments issued and backed by a state, city, or other political entity to raise funds needed to support general governmental needs or finance special projects, such as the building of roads, schools, parks, etc. An important advantage of municipal and government agency bonds is the potential for federal tax savings, which can be particularly beneficial to those who fall within a high federal tax bracket.

Mutual Fund

A mutual fund is an SEC-registered investment company comprising a professionally managed portfolio of stocks, bonds or other securities in which individual investors can pool their assets by purchasing shares of the fund. The price of a share of a mutual fund at any point in time is equal to the fund’s net asset value (NAV) divided by the total number of shares. A mutual fund provides the advantages of professional management, diversification and the ability to invest in specialized areas such as international companies or emerging market sectors. Mutual funds also offer liquidity, allowing shareholders to redeem their shares at the current NAV at the end of any trading day.

Net Asset Value (NAV)

The Net Asset Value of a mutual fund or other investment portfolio is equal to the value of all the investments owned by that portfolio, less any liabilities.