Each year, the stock market tends to increase slightly in value between December 31 and the end of the first week of January.
Known as the January Effect, this rise starts when investors sell underperforming stocks at year-end to claim capital losses on their tax returns.
After the new tax year begins on January 1, the same investors tend to reinvest the money from those sales, heightening demand temporarily, and making the overall market rise slightly during that week.
- Browse Related Terms: Capital gains distribution, Compounding, Direct investment, Direct purchase plan (DPP), Distribution, dividend, Dividend reinvestment plan (DRIP), dollar cost averaging, Fractional share, Growth, January Effect, reinvestment, total return, Total return index
An account owned by two or more persons. Either party can conduct transactions separately or together as set forth in the deposit account contract. In addition, some states allow one owner of the account to use the share balance as collateral in case of default.
- Browse Related Terms: Automated Clearing House (ACH), Automated Teller Machine (ATM), Error Resolution, Frozen Account, Garnishment/Garnish, General account, Joint Account, Margin account, Minimum Amount to Open, Point of Sale (POS), Right of offset, statement
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A loan that exceeds the statutory size limit eligible for purchase or securitization by either FNMA or FHLMC.
- Browse Related Terms: Advance Fee Loan Scam, Conforming Loan, construction loan, Credit Service Organization, Cure, Debit card, Default, Escrow Account, Jumbo, Loan/Mortgage Broker, processor, Third Party Fees
Jumbo CDs are large-denomination certificates of deposit with balances of at least $100,000, and sometimes $1 million or more.
They tend to pay higher rates than smaller CDs and are purchased primarily by institutional investors. However, they're increasingly marketed to individual investors as low-risk, fixed-income assets.
Jumbo CDs may be negotiable or non-negotiable. Negotiable CDs may be traded in the secondary market and are often issued in bearer form, which means that physical possession of the paper document is the sole proof of ownership. The banks that sell bearer CDs keep no records of ownership.
Non-negotiable Jumbo CDs, like conventional CDs, remain on deposit in the bank that issued them and are held in the name of the purchaser.
These Jumbo CDs, like other bank deposits, are FDIC insured, up to $100,000 per depositor in different categories of taxable accounts in each bank and up to $250,000 if they are held in self-directed retirement accounts, such as individual retirement accounts (IRAs).
- Browse Related Terms: Annual percentage yield (APY), certificate of deposit, Certificate of deposit (CD), Compound Interest, Escheat, Eurodollar, Individual Account, Interest Rate (High/Low), Jumbo CD, Passbook, Savings account, Simple interest, Time deposit
In the world of bonds, the term junior means having less claim to repayment.
If you own a junior security and the issuing company goes out of business, you have less claim on any assets than an investor who owns a senior security issued by the same company.
But all bondholders, whether they own junior or senior securities, are senior to, or have a greater claim than, holders of preferred stock, who in turn are senior to holders of common stock.
- Browse Related Terms: Bearer bond, Coupon, Debenture, Junior security, Registered bond, Revenue bond, Subordinated debt, transfer agent, Unsecured bond
Junk bonds carry a higher-than-average risk of default, which means that the bond issuer may not be able to meet interest payments or repay the loan when it matures.
Except for bonds that are already in default, junk bonds have the lowest ratings, usually Caa or CCC, assigned by rating services such as Moody's Investors Service and Standard & Poor's (S&P).
Issuers offset the higher risk of default on junk bonds by offering substantially higher interest rates than are being paid on investment-grade bonds. That's why junk bonds are also known, more positively, as high-yield bonds.
- Browse Related Terms: Bond fund, Bond rating, Currency, Duration, Fallen angel, Gold standard, High-yield bond, Investment grade, Junk bond, Moody's Investors Service, Inc., Rating, Rating service, Risk premium