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Tax Deferred Account

An investment account in which income and realized capital gains are not taxable until the account makes distributions. An example of a tax deferred account is an IRA.

Tax Efficient

A portfolio management strategy that minimizes the impact of income and capital gains taxes.

Tax Equivalent Yield

A mathematical comparison of yields on taxable bonds (governments and corporates) to tax-exempt bonds (municipals) to determine which ones have better returns after tax.

Tax Exempt Bonds

Municipal and state bonds that pay interest that is exempt from federal income tax.

Tax Loss

When the cost of a security exceeds the proceeds when the security is sold. Losses can be used to offset gains.

Tax Shelter

An investment that provides tax advantages, for example tax deductions.

Technical Indicators

Statistics that measure changes in stock market activity.

Ticker Symbol

Combinations of letters that identify the issuer of securities that are traded on exchanges.

Time Value of Money

The relationship between an investment, the length of time the money is invested, and the expected rate of return from the investment.

Time Weighted Rate of Return

A methodology for calculating performance that minimizes the impact of cash flow. Used to compare the performance of money managers to each other and determine rankings.

Timing

The process of when to buy and when to sell securites. Ideal timing is to buy when securities are less expensive and sell when they are more expensive. Ideal timing is virtually impossible to execute.

Transfer Tax

A federal or state tax imposed on the transfer of ownership or sale of securities that is paid by the transferor or seller.

Treasuries

Debt securities that are issued by the U.S. Treasury.

Treasury Bill

A U.S. Treasury obligation that is sold at a discount when issued for a typical term of 91 days.

Treasury Bond

A long-term debt obligation of the U.S. Treasury that is issued in denominations of $1,000 or more for maturities of 10 to 30 years.

Treasury Inflation Protected Securities (TIPS)

U.S. Treasury bonds and notes that produce returns that are indexed to inflation as measured by the Consumer Price Index (CPI).

Treasury Note

A U.S. Treasury obligation that is issued in denominations of $1,000 or more for maturities of one to seven years.

Trustee

A person or company that is legally responsible for the management of assets that are held in trust for other people. For example, the trustees of a pension plan.

12-b-1 Fee

Some mutual funds assess this fee to shareholders to recover costs they incur for marketing the fund to new investors. The fee is frequently used to pay selling commissions to custodians and financial representatives.