Securities and Exchange Commission (SEC) The Securities and Exchange Commission is a federal government agency established to protect the individual investor from fraud and manipulative practices in the securities marketplace. The commission oversees and regulates the activities of registered investment advisors, stock and bond markets, broker/dealers, and mutual funds.
Security A security is an investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity. Securities include total or partial ownership of an asset, rights to ownership of an asset, and certificates of debt from an institution. Examples of securities include stocks, bonds, certificates of deposit, and options.
Simplified Employee Pension Plan (SEP) A type of plan under which the employer contributes to an employee's IRA. Contributions may be made up to a certain limit and are immediately vested.
SIMPLE A retirement plan sponsored by companies with fewer than 100 employees which is attractive for employers because it avoids some of the administrative fees and paperwork of plans such as 401(k)s.
Standard and Poor's 500 The Standard and Poor’s 500 Index is a market index of 500 of the top-performing United States corporations. This index is a broader measure of the domestic market than the Dow Jones Industrial Average, indicating broad market changes. The S&P 500 index includes 400 industrial firms, 20 transportation firms, 40 utilities, and 40 financial firms.
Stock Split A stock split is when a company’s board of directors and the shareholders agree to increase the number of shares outstanding. The shareholders equity does not change; instead, the number of shares increases while the value of each share decreases proportionally. For example, in a 2-for-1 stock split, a shareholder with 100 shares prior to the split would now own 200 shares. The price of the shares, however, would be cut in half; shares that cost $40 before the split would be worth $20 after the split.