ExpertGlossary

Stocks that increase in value over the course of the trading day are described as gainers or advancers.

Those that increase the most in relation to their opening price are called percentage gainers, or percentage winners. Those that go up the greatest number of points are called net gainers, or dollar winners.

On a day that the stock market indexes go up, there are typically more gainers than there are losers or laggards - stocks that have lost value. And on a day where there's little change, there are likely to be similar numbers of gainers and losers.

A general account is a deposit account. In the insurance industry, a general account is the account into which all incoming funds, except those designated for a separate account, are deposited.

Deposits to a general account include premiums for life insurance and fixed annuities, plus assets in the fixed portfolios of variable annuities.

Assets in a general account can be used to cover company expenses and are vulnerable to creditors' claims. In fact, this account can be sued to pay the firm's obligations. That's one reason that contract holders are cautioned that payouts are subject to the insurer's ability to pay its claims.

The Federal Reserve considers brokerage firms' margin accounts that are governed by Regulation T as general accounts. The Fed requires that all margin transactions made on behalf of clients be conducted through the clients' individual general accounts.

A General Agreement on Tariffs and Trade was signed in 1947 to provide an international forum to encourage free trade, reduce tariffs, and provide a mechanism for resolving trade disputes.

The Uruguay Round Agreements Act was ratified by Congress in 1994 to foster trade by cutting international tariffs, standardizing copyright and patent protection, and liberalizing trade legislation.

State and local governments issue general obligation (GO) municipal bonds and pay the interest and repay the principal from general revenues.

GO bonds considered somewhat less risky, and so pay slightly lower rates, than the same municipality's revenue bonds, which are backed by income from a specific project or agency.

A municipality's general revenues come from the taxes it is able to raise and money it can borrow. Those powers are sometimes described as its full faith and credit.

1. Bequests and other forms of inheritance;
2. Suitable mementos of a function honoring the reporting individual;
3. Food, lodging, transportation, and entertainment provided by a foreign government within a foreign country or by the United States Government, the District of Columbia, or a State or local government or political subdivision thereof;
4. Food and beverages which are not consumed in connection with a gift of overnight lodging;
5. Communications to the offices of a reporting individual, including subscriptions to newspapers and periodicals;
6. Consumable products provided by home-State businesses to the offices of the President or Vice President, if those products are intended for consumption by persons other than the President or Vice President; or
7. Exclusions and exceptions as described at Sec. 2634.304(c) and (d).

A gift tax is a tax on the combined total value of the taxable gifts you make that exceed your lifetime federal tax-exempt limit of $1 million. The tax is figured as a percentage of the value of your gifts over that amount.

For example, if during your lifetime you make taxable gifts of money and property valued at $1.2 million, you will owe federal gift tax on $200,000. You might also owe state gift tax, depending on where you live.

However, you can make annual tax-free gifts to as many individuals and nonprofit institutions as you like. As long as the value of the gifts to each individual is less than the annual limit set by Congress, that amount doesn't count against your lifetime tax-free limits.

Gifts to nonprofits are not taxed and don't count against your lifetime limit either.

If you're married, you can give your spouse gifts of any value at anytime, totally tax free, provided he or she is a US citizen. There are limits on spousal gifts when the spouse is not a citizen.

You are not required to report the tax-free gifts on your tax return, but you must report taxable gifts whose value exceeds the annual tax-free limit on IRS Form 709 for the year you make them. The tax becomes due when the cumulative total exceeds $1 million.

However, the law setting the $1 million limit is set to expire at the end of 2010. Unless Congress acts before that date, the lifetime tax-exempt limit will fall back to $675,000.

When the term gilt-edged is applied to bonds, it's the equivalent of describing a stock as a blue chip.

Both terms mean that the issuing corporation has a long, strong record for meeting its financial obligations to its investors. That includes making interest and dividend payments on time and redeeming bonds on schedule.

To raise money in more than one market, some corporations use global depositary receipts (GDRs) to sell their stock on markets in countries other than the one where they have their headquarters.

The GDRs are issued in the currency of the country where the stock is trading. For example, a Mexican company might offer GDRs priced in pounds in London and in yen in Tokyo.

Individual investors in the countries where the GDRs are issued buy them to diversify into international markets. GDRs let you do this without having to deal with currency conversion and other complications of overseas investing.

However, since GDRs are frequently offered by newer or less-known companies, the prices are often volatile and the stocks may be thinly traded. That makes buying GDRs riskier than buying domestic stocks.

Global, or world, mutual funds invest in US securities as well as those of other countries. In that way, they differ from international funds, which invest only in non-US markets.

Although global funds may keep as much as 75% of their assets invested in the US, fund managers are able to take advantage of opportunities they see in various overseas markets.

The gold standard is a monetary system that measures the relative value of a currency against a specific amount of gold.

It was developed in England in the early 18th century when the scientist Sir Isaac Newton was Master of the English Mint. By the late 19th century, the gold standard was used throughout the world.

The US was on the gold standard until 1971, when it stopped redeeming its paper currency for gold.

When you go long, you buy a security or other financial product that you intend to hold for a period of time or one that you expect to increase in value so that you can sell it at a profit.

Going long is the opposite of going short, which means you sell an investment, usually because you expect it to decline in value in the near future.

If you're buying and selling options or futures contracts, you go long when you enter a contract to buy and you go short when you enter a contract to sell.

If you want to buy or sell a security at a specific price, you can ask your broker to issue a good 'til canceled (GTC) order. When the security reaches the price you've indicated, the trade will be executed.

This order stays in effect until it is filled, you cancel it, or the brokerage firm's time limit on GTC orders expires.

A GTC, also called an open order, is the opposite of a day order, which is automatically canceled at the end of the trading day if it isn't filled.

In addition, some firms offer good through month (GTM) or good through week (GTW) orders.

A good faith deposit is a sum of money provided by a buyer to a seller, which demonstrates the buyer's intention to purchase.

For instance, if you've decided on a home you want to buy, you generally make a good faith deposit to support your bid.

A good faith deposit, also called a binder or earnest money, is usually a fixed amount that's standard in the community where you're buying. It's different from a down payment. That's a larger cash payment, figured as a percentage of the purchase price, which you make when you sign the contract to purchase the property.

If you and the seller can't agree on the terms of the sale, you generally get your good faith deposit back.

A good faith estimate is a written summary provided by your mortgage lender. It shows the amount you can expect to pay at your real estate closing to cover all the fees and expenses that are part of arranging your mortgage loan.

It includes, among other things, the title search and title insurance, lawyers' fees, transfer taxes, and filing fees. The total amount of a good faith estimate is in addition to the down payment you will make.

When the term good will is used in connection with evaluating a company, it covers the intangible value of its reputation, its satisfied clients, and its productive work force. Those factors are all considered evidence of the corporation's potential to produce strong earnings.

A corporation goes public when it issues shares of its stock in the open market for the first time, in what is known as an initial public offering (IPO).

That means that at least some of the shares will be held by members of the public rather than exclusively by the investors who founded and funded the corporation initially or the current owners or management.

When you enter a futures contract that commits you to sell or deliver the underlying product, you go short or have a short position.

You're also going short when you write an options contract, giving the buyer the right to exercise the contract. With stocks, you go short when you borrow shares of stock through your broker and sell them at their current market price.

In contrast, you go long when you enter a futures contract to buy, when you purchase an options contract, or buy a stock either to hold in your portfolio or sell at some point in the future.

The term government bond is used to describe the debt securities issued by the federal government, such as US Treasury bills, notes, and bonds. They're also known as government obligations.

You can buy and sell these issues directly using a Treasury Direct account or through a broker.

Treasurys are backed by the full faith and credit of the US government, and the interest they pay is exempt from state and local, though not federal, income taxes. The cash raised by the sale of Treasurys is used to finance a variety of government activities.

Debt instruments issued by government agencies are also described as government bonds, or government securities, though they are not backed by the government's ability to collect taxes to pay them off.

For example, bonds issued by the Government National Mortgage Association (Ginnie Mae) and the Tennessee Valley Authority (TVA) are government bonds.

The Government National Mortgage Association, known as Ginnie Mae, guarantees mortgage-backed securities issued by approved private institutions and marketed to investors through brokerage firms.

The agency's dual mission is to provide affordable mortgage funding while creating high-quality investment securities that offer safety, liquidity, and an attractive yield.

Ginnie Mae securities are backed by mortgages that are insured by either the Federal Housing Administration (FHA) or the Rural Housing Service (RHS), or guaranteed by the Department of Veterans Affairs (VA).

Ginnie Mae securities are sold in large denominations - usually $25,000. But you can buy Ginnie Mae mutual funds, which allow you to invest more modest amounts.

Ginnie Mae is an agency of the US Department of Housing and Urban Development (HUD).

A grace period is the number of days between the date a credit card issuer calculates your new balance and the date your payment is due.

In most cases, if you have paid the previous balance in full and on time, and you haven't taken any cash withdrawals, no finance charges are added to the amount of your purchases.

If you generally pay the entire balance due on time, you may want to choose a card with a longer rather than a shorter grace period, assuming the other terms are comparable. That gives you more time to be sure your payments arrive on time.

However, a minority of credit arrangements include a minimum finance charge, even if you do pay on time. Other lenders go back two billing cycles and will add finance charges if you have not paid the full amount due each time.

The grace period on a student loan allows you to defer repayment so that the first installment isn't due until six or nine months after you graduate or are no longer enrolled at least half time. The timing depends on the type of loan.

You also have a grace period in which to pay the premium on an insurance policy before the policy is cancelled. It's usually one month after the due date.