Financial Glossary s-t

GLOSSARY OF FINANCIAL & INVESTMENT TERMS

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S&P 500	The history of the S&P 500, also referred to as the S&P Stock Price Index, dates back to 1923, when Standard and Poor's introduced an index covering 233 companies. In 1957, the Index was expanded to include a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 focuses on the large-cap segment of the market, with over 80% coverage of U.S. equities, it is also a valid proxy for the total market. See also Index.
S&P Composite 1500 Index	The S&P Composite 1500 Index, established in 1994, combines three leading indices—the S&P 500, the S&P MidCap 400 and the S&P SmallCap 600—to form an investable benchmark of the U.S. equity market. Covering approximately 85% of the U.S. market capitalization, the S&P 1500 has the familiar characteristics of the S&P 500, but offers broader market exposure. Index
S&P MidCap 400 Index	The S&P MidCap 400 Index, established in 1991,measures the movements of 400 representative domestic companies with capitalization between $1 million and $4.5 billion, often referred to as the “emerging growth” segment of the market. The Index covers just over 7% of the U.S. equities market. Index
S&P SmallCap 600 Index	The S&P SmallCap 600 Index, established in 1994, measures the movements of 600 representative domestic companies with capitalization between $300 million and $1.5 billion. Standard & Poor's adds new stocks to the index based not only on size, but also on financial viability, liquidity, adequate float size, and other trading requirements. The S&P SmallCap 600 Index covers 3 to 4% of the domestic equities market. Index
Security	The term refers to any investment instrument that is issued by a corporation, government, or other organization which offers evidence of debt (bonds, notes, etc.) or equity (stocks).
Sharpe Ratio	A ratio calculated by subtracting the risk-free (3-month Treasury bill) rate from a portfolio’s total return and then dividing this by its standard deviation. The resulting fraction can be thought of as a return per unit of risk. In general, a higher Sharpe ratio suggests stronger risk-adjusted performance.
Short Selling	Selling shares of a stock or other security that the seller does not own (e.g., shares borrowed from a brokerage firm) with the hope that the value of the stock will decline, allowing the seller to buy back the borrowed shares at a lower price and keep the profit.
Short-Term Bonds	Bonds issued with maturities of five years and less
Single Premium Annuity	An annuity that accepts only one deposit (premium).
Small Company Stocks	Among the various categories of stocks, small company stocks usually hold the greatest growth potential—but also correspondingly high risk potential. A small company stock may be relatively new to the marketplace, so its price has a lot of room to grow if the company succeeds. But with the increased potential for long-term price appreciation, there is also a bigger risk of a price drop. These companies don’t have the financial strength of large corporations.
Standard Deviation	A statistical measure of dispersion about an average, it describes how widely returns vary over a designated time period. For example, if a portfolio has a high standard deviation, the predicted range of performance is wide, implying greater volatility (risk).
Stock Exchange	Stock exchanges exist across the world to provide an organized marketplace for the buying and selling of stocks and other securities. Stock exchanges operate under strict rules, regulations and guidelines. In the United States, the major national exchanges are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX) and the National Association of Securities Dealers (NASDAQ). Because the exchanges centralize securities trade, stock prices can be tracked in real time. Investors world-wide can watch as a stock's price fluctuates as a result of factors such as activity within the company, changes in the economy or reports from the media that impact the company and/or its industry.
Stocks	Stocks, or equity securities, are simply shares of ownership in a corporation that are available for purchase by the public. The price of a company's stock changes from day to day, reflecting the company's performance. That's why stocks are riskier than other investments—because stock values can fluctuate greatly in a very short period of time. Over the long term, stocks have historically offered the best opportunity for money to grow—provided the investor has enough time to ride out the inevitable ups and downs of the market. If you panic and cash out when prices start to fall, chances are good that you will take a loss.
Term Insurance	Term insurance is the simplest and least expensive form of life insurance. Its coverage is limited to a specified term (usually a year), and premiums —the payments made on a policy to keep it in force—can rise at each renewal.