Some Initial Thoughts... 1

The financial landscape is littered with acronyms. FYI, here are a few of the more important ones.

Acronym         What It Stands For                                         What It Means

ACATS           Automated Client Account Transfer System           Electronic system for moving accounts between brokerage firms

ACH               Automated Clearing House                                   Electronic funds transfer system

BPs (“bips”)    Basis Points                                                        1/100th of 1%; used frequently with interest rates

EPS               Earnings Per Share                                              Net profits of a company/shares outstanding

ETF               Exchange Traded Fund                                         A fund that trades on an exchange (like a stock) that tracks a defined index

FINRA            Financial Industry Regulatory Authority                 One of the many regulators for the financial services industry

IRA                Individual Retirement Arrangement                        Account allowing for tax-deferred accumulation

IRR                Internal Rate of Return                                         Return on an investment that reflects the timing of all cash flows

JT                  Joint Tenants                                                       Account title showing two or more co-owners

JTWROS        Joint Tenants with Rights of Survivorship                Upon the death of one tenant, allows for the transfer of assets to the other

MOP              Maximum Offer Price                                           Price of a fund, including any sales charges

NASDAQ       National Association of Securities Dealers Automated Quotations  World’s 2nd largest stock exchange by market cap

NAV               Net Asset Value                                                  Net assets of a fund, quoted per share

NYSE            New York Stock Exchange                                   World’s largest stock exchange by market cap

PE (or P/E)    Price Earnings                                                    Multiple at which a stock trades relative to its earnings

RMD              Required Minimum Distribution                            Mandatory withdrawals from retirement accounts

ROI                Return on Equity                                                Net profit as a percent of the amount invested

SD                 Standard Deviation                                             A measure of the variation of returns

TOD               Transfer on Death                                              Allows for transferring assets held in a single-named or joint account to beneficiaries upon death

UTD               Under Trust Dated                                              Generally shown before the trust’s creation date

UTMA            Uniform Transfer to Minors Act                             Allows assets to be transferred to a minor with a named custodian

XD                 Ex-Dividend                                                        On/after the XD date, a buyer is not entitled to the current dividend payment

YTM               Yield to Maturity                                                 Yield on a bond that reflects both the coupon payments and its premium/discount

Robert A. “Rocky” Mills is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Westlake Village.  The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice.  The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC, or its affiliates.