Abbreviations and acronyms

Below are brief descriptions to assist new investors. A glossary of words relevant to investing concepts can be found here.

A-Z
A B  C  D  E  F  G  H  I  J  K  L  M  N  O  P  Q  R  S  T  U  V  W  X  Y  Z

A

 * AA - Asset allocation; one of the most important decisions that investors make
 * AAGR - Average Annual Growth Rate
 * ACATS - Automated Customer Account Transfer Service. Enables the transfers of many different types of assets.
 * ACH - Automated clearinghouse. A nationwide (US) network used by depository institutions to transfer funds.
 * AEOI - Automatic Exchange Of Information. Umbrella term for international tax information sharing regulations. See: FATCA and CRS.
 * AFFE - Acquired Fund Fees and Expenses
 * AFFO - Adjusted Funds From Operations
 * AGI - Adjusted Gross Income
 * AMT - Alternative Minimum Tax. An extra tax some people have to pay on top of the regular income tax. See: Alternative Minimum Tax 101
 * AP - Authorized participants. Part of the Exchange-traded fund share creation / redemption mechanism.
 * APY - Annual Percentage Yield, See:  APR versus APY
 * APR - Annual Percentage Rate, See:  APR versus APY
 * ATH - All-Time High. A phrase used in the Bogleheads forum meaning that the market is at a historically high level.
 * AUD - Australia Dollar
 * AUM - Assets Under Management. Funds "managed" by an investment adviser who receives a fixed percentage of a client's portfolio.
 * AWI - Average Wage Index used in Social Security benefit calculations

B

 *  BDC - Business development company. One of several investment company structures. See: Business development company
 * BTM - Book To Market ratio (inverse of Price to Book). Also known as the "price-equity ratio." See: Price to Book

C

 * CAD - Canada Dollar
 * CAGR - Compound Annual Growth Rate
 * CAPE - Cyclically Adjusted Price Earnings. Also known as the PE10. The Price / Earnings ratio, averaged over the past 10 years and adjusted for inflation. See: Shiller PE10
 * CAPM - Capital Asset Pricing Model. A financial model used to analyze risk versus return.
 * CCF - Collateralized Commodity Futures
 * CD - Certificate of Deposit
 *  CEF - Closed End Fund. One of several investment company structures. See: Closed-end funds
 * CFD - Contract For Difference. Available in many major trading countries, but not the US. SEC rules do not allow US investors to use CFDs.
 * CFP - Certified Financial Planner. An investment adviser who has passed the CFP certification requirement.
 * CG - Capital Gains. The profit (or loss) when you sell a stock. See: Capital gains distribution
 * CHF - Swiss Franc
 * CIT - Collective Investment Trust. A pooled group of trust accounts operated by a trust company or a bank.
 * CMA - Cash Management Account. A marketing term for services offered to bank customers. See: Cash management
 * COLA - Cost-of-Living Adjustment
 * CPI - Consumer Price Index, See: Consumer price index
 * CRS - Common Reporting Standard. OECD international financial account reporting standard.
 * CRSP - Center for Research in Security Prices A comprehensive securities database from the University of Chicago, Booth School of Business.
 * CUSIP - A code that identifies a North American financial security, derived from Committee on Uniform Security Identification Procedures. See: CUSIP.

D

 * DB - Defined Benefit. See: Defined benefit pension plan
 * DCA - Dollar Cost Averaging. Contributing to your investments over time. See: Dollar cost averaging
 *  DDM - Dividend Discount Model. A way to determine if a stock price is a good buy. Used by financial analysts, not for new investors.
 * DFA - Dimensional Fund Advisors, an investment firm.
 * DH - Dear Husband, an internet term.
 * DI - Debt Instrument
 * DINK - Double Income, No Kids
 * DPSP - Deferred Profit Sharing Plan
 * DRIP - Dividend Re-Investment Plan. A way to reinvest stock dividends. See: Dividend Reinvestment Plan - DRIP
 * DTC - Depository Trust Company. The company which maintains security ownership records.
 * DW - Dear Wife, an internet term.

E

 * EAFE - Europe, Australia and Far East. A regional equity grouping. See: Domestic/International
 * EBITA - Earnings Before Interest, Taxes and Amoritization
 * EM - Emerging Market. Nations with social or business activity in the process of rapid growth and industrialization. Emerging Markets Index Returns lists the emerging market countries.
 * EMH - Efficient Market Hypothesis. Share prices already account for changes in market conditions, thus you can't "beat the market."
 * EMT - Efficient Market Theory (same as EMH)
 * EPS - Earnings Per Share. Used in conjunction with the  Price/Earnings ratio.
 * ERISA - Employee Retirement Income Security Act. A U.S. law that sets minimum standards for most voluntary pension and health plans in private industry.
 * ERP - Equity Risk Premium
 * ER - Expense Ratio. Costs used to operate a fund. Using low cost funds is a key objective.
 *  ESA - Education Savings Account. A tax deferred account dedicated to saving for education expense. See: Coverdell Education Savings Accounts
 * ESG - Environmental, Social, Governance. See: Environmental, Social, and Governance (ESG) Criteria
 * ESPP - Employee Stock Purchase Plan. An employee stock purchase plan (ESPP) is a company-run program in which participating employees can purchase company stock at a discounted price. See: Employee Stock Purchase Plan (ESPP)
 * ETF - Exchange Traded Fund. One of several registered investment company structures. Often compared with a mutual fund.
 * EUR - Euro

F

 * FAANG - Facebook, Apple, Amazon, Netflix, and Google. Originally termed as FANG (without Apple).
 * FATCA - Foreign Account Tax Compliance Act. US extraterritorial tax law requiring all non-US financial institutions to search their records for customers with US 'indicia' such as a US place of birth, and report these people's financial activities to the IRS.
 * FEIE - Foreign Earned Income Exclusion. US income tax exclusion for Americans living abroad. See: Foreign Earned Income Exclusion
 * FERS - Federal Employees Retirement System
 * FF - Fama-French i.e. Eugene Fama and Kenneth .R. French, coauthors of the Fama-French 3-Factor model. The Morningstar Style Box&trade; is based on this model.
 * FF3FM - Fama/French 3-factor model. See above.
 * FFO - Funds From Operations
 * FI - fixed income; alternately financial independence
 * Fido - Jocular nickname for Fidelity Investments
 * FIFO - First-In, First-Out
 * FIRE - Financial Independence / Retire Early. Colloquial acronym.
 * FOMO - Fear Of Missing Out. An investor behavior where fear of inaction will miss an investment opportunity. See.
 * FRA - Full Retirement Age. The age at which your Social Security benefits are not adjusted for claiming early. See: Social Security
 * FTC - Foreign Tax Credit. A way to compensate against double taxation when owning stock outside the U.S. See: Foreign tax credit
 * FWF - Financial Wisdom Forum, the Canadian sister discussion forum

G

 * GAAP - Generally Accepted Accounting Principles. A set of accounting principles, standards and procedures used to compile financial statements.
 * GARP - Growth at a reasonable price
 * GBP - Pound Sterling
 * GDP - Gross Domestic Product
 * GIC - Guaranteed Investment Contract. An insurance company contract that provides principal preservation and a specified rate of return. See: Stable Value Fund
 * GNMA - Government National Mortgage Association. Also known as "Ginnie Mae." See: GNMA
 *  GO - General Obligation (municipal bond). A municipal bond secured by the taxing and borrowing power of the municipality issuing it.
 * GSE - Government-Sponsored Enterprise, such as Fannie Mae or Freddie Mac.

H

 * HCOL - High Cost of Living
 * HIFO - Highest In, First Out. Highest cost of purchase is the first to be used or taken out of stock.
 * HmL - High minus Low (High B/P return - Low B/P return) Value Premium. See: Fama and French three-factor model
 * HSA - Health Savings Account

I

 * IANAL - "I am not a lawyer". A warning that the reader should not take an opinion as professional legal advice. See: IANAL on Wikipedia.
 * IANYL - "I am not your lawyer". Similar to IANAL, but from a lawyer who does not represent that person. Do not rely upon this advice even though this person may be an attorney.
 * IB - Interactive Brokers
 * ILB - International Large Blend. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)
 * ILG - International Large Growth. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)
 * ILV - International Large Value. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)
 * IPO - Initial Public Offering. The process of offering shares of a private corporation to the public in a new stock issuance.
 * IPS - Investment Policy Statement. An Investment Policy Statement helps investors stay on track with their long-term goals.
 * IRA - Individual retirement arrangement. A personal savings plan which allows you to set aside money for retirement.
 * IRMAA - Income-Related Monthly Adjustment Amount. An additional premium amount for Medicare Part B and Medicare prescription drug coverage.
 *  iREIT - International Real Estate Investment Trust.
 * IRS - Internal Revenue Service
 * ISB - International Small Blend. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)
 * ISG - International Small Growth. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)
 * ISIN - International Securities Identification Number. A unique international identifier for a security.
 * ISV - International Small Value. A stock classification. See: Stock style boxes (Applies to all stocks, not just international.)

J

 * JPY - Yen

K

 * KISS - Keep It Simple, Stupid
 * KYC - Know Your Customer. Alternatively, Know Your Client.

L

 * LB - Large Blend. A stock classification. See: Stock style boxes
 * LBYM - See: Living below your means
 * LG - Large Growth. A stock classification. See: Stock style boxes
 * LMP - Liability Matching Portfolio. A portfolio which produces enough guaranteed income to meet needs, such as an all-TIPS portfolio for retirement income. See: Matching strategy
 * LT - Long Term. Usually used to denote the maturity or duration of a fixed income security. See: Bond style boxes
 * LTC - Long Term Care. See: Long-term care insurance
 * LTCG - Long Term Capital Gains. Gains on securities held for more than one year. See: Capital gains distribution
 * LV - Large Value. A stock classification. See: Stock style boxes

M

 * MAGI - Modified Adjusted Gross Income. Adjusted Gross Income with certain items adjusted; exactly what is adjusted depends on the specific tax rule, such as Roth IRA conversions and IRA deductions not affecting IRA eligibility.
 * MBR - Mega Backdoor Roth. A strategy to rollover 401(k) after-tax contributions to a Roth IRA. See: After-tax 401(k)
 * MCS - Monte Carlo Simulation. A problem solving technique using multiple trial runs, called simulations, which varies numbers within statistical constraints. The solution will be a statistical distribution.
 * MER - Management Expense Ratio. Expressed as a percentage. The term is used in Canada. Also see: Management expense ratio
 * MF - Mutual Fund. A registered investment company that pools investor capital for the purpose of investing in securities.
 * MMF - Money Market Fund. A mutual fund often used because it can be easily converted to cash.
 * MiFID - Markets in Financial Instruments Directive. EU regulation aimed at improving European investor protections.
 * MLP - Master limited partnership
 * MOABO - Mother Of All Buying Opportunities. A Bogleheads' idiomatic term coined by forum member cfs. An early mention is in this thread: Market fluctuation in late 2008.
 * MPT - Modern Portfolio Theory, also Modern portfolio theory. Diversify your assets to minimize risk to your investments.
 * MSCI - Morgan Stanley Capital International Inc. A major provider of stock market indexes.
 * MVO - Mean Variance Optimization. A method developed by economist Harry Markowitz for diversifying a portfolio (Modern Portfolio Theory). See MPT above.
 * MYGA - Multi-Year Guaranteed Annuity

N

 * NAREIT - National Association of Real Estate Investment Trusts
 * NASD - National Association of Securities Dealers
 * NAV - Net Asset Value. A mutual fund's price per share.
 * NIIT - Net investment income tax. The ACA (Affordable Care Act) 3.8% surtax on Net Investment Income (NII).
 * NRA - Non-resident alien. A person who is not a US resident and not a US citizen.
 * NZD - New Zealand Dollar

O

 * OCF - Ongoing Charges Figure. Term used by some non-US funds to indicate expenses. Approximately equivalent to TER.
 * OECD - Organisation for Economic Co-operation and Development
 * OMY - One More Year (not investing related).
 * OP - Original Poster (not investing related).

P

 * PAS - Vanguard's Personal Advisory Service
 * P/B - Price Book Ratio. Also known as the "price-equity ratio." See: Price to Book
 * P/E - Price Earnings Ratio. A ratio of a company's current share price compared to its per-share earnings. See: P/E
 * PE10 - Price / Earnings ratio, averaged over the past 10 years and adjusted for inflation. Also known as CAPE. See: Shiller PE10
 * PFIC - Passive Foreign Investment Company. Investment vehicles registered outside the US which are subject to US taxation.
 * PIA - Primary Insurance Amount. The base Social Security benefit before any adjustments such as retiring before or after Full Retirement Age (FRA).  See: Social Security
 * POA - Power of Attorney. A legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal). See: List of estate planning terms (link to definition).
 * PPP - Purchasing Power Parity. A theory that measures prices at different locations using a common basket of goods. Can also mean the US Paycheck Protection Program.
 * PRIIPs - Packaged Retail Investment and Insurance-Based Products. EU regulation aimed at improving European investor protections. Related to MiFID.

Q

 * QCD - Qualified Charitable Distribution. A qualified charitable distribution (QCD) is the withdrawal of funds from an IRA with the intention of donating them directly to a qualified charity. There are tax benefits that go along with this strategy. And QCDs can be used when taking required minimum distributions (RMDs) in retirement.
 * QDI - Qualifying Dividend Income. A dividend which meets IRS requirements to (usually) get a lower tax rate. See: Qualified dividend
 * QJSA - Qualified Joint and Survivor Annuity (pension plans)

R

 * RAFI - Research Affiliates Fundamental Index®, one of a number of indexes which take account of factors besides market capitalization.
 * RBD - Really Bad Day. A Bogleheads' idiomatic term coined by forum member livesoft. An early mention is in this thread: Today was a Really Bad Day.
 * RE - Real Estate
 * REIT - Real Estate Investment Trust. An asset class based on real estate interests.
 * RISMAT - Retirement Income Analysis with scenario matrices. A free online book by academic William F. Sharpe. See: RISMAT
 * RMD - Required Minimum Distributions. See: Required Minimum Distributions
 * RSU - Restricted Stock Unit. A form of company stock compensation for an employee.
 * RTM - Reversion to the Mean. Over the long-term, changes will come back to an average value. See: Remarks by Mr. Bogle regarding the stock market

S

 * SARSEP - Salary Reduction Simplified Employee Pension Plan
 * SCV - Small Cap Value. A stock classification. See: Stock style boxes
 * SD - Standard Deviation. In finance, a way to measure volatility (price variation)
 * SDBA - Self directed brokerage account. An employer retirement plan option which allows employees to choose funds outside the plan.
 * S&D - Slice and dice. Adjusting your stock allocations to intentionally deviate from the market capitalization (market "cap") weighting. (For advanced investors only.)
 * SEC - Securities and Exchange Commission
 * SEP - Simplified Employee Plan. An employer retirement plan. See: SEP
 * SmB - Small minus Big (Small stock return - Large stock return) Size premium. See: Fama and French three-factor model
 * SS - Social Security - The Social Security Administration maintains a comprehensive list of abbreviations, acronyms, and a glossary:
 * A Glossary of Social Security Terms
 * Glossary of Acronyms Related to Computations
 * List of Abbreviations and Acronyms
 * SOE - State-Owned Enterprises
 * SORR - Sequence of Returns Risk. Also called Sequence Risk.
 * SPIA - Single Premium Immediate Annuity. An insurance contract that pays a fixed/or variable amount for the life of the annuitant (policy holder). See: bob90245's primer
 * SRI - Socially Responsible Investing. An approach that takes corporate responsibility and societal concerns into consideration.
 * SSI - Supplemental Security Income
 * ST - Short Term. Usually used to denote the maturity or duration of a fixed income security. See: Bond style boxes
 * S&P - Standard and Poors. A provider of security credit ratings and stock indexes. See: Stock Market Indexing
 * STCG - Short Term Capital Gains. Gains on securities held one year or less. See: Capital gains distribution
 * STRIPS - Separate Trading of Registered Interest and Principal of Securities
 * SVF - Stable value fund
 * SWAN - Sleep Well At Night. An idiomatic term.
 * SWF - Sovereign Wealth Fund
 * SWR - Safe Withdrawal Rate. The percentage of assets that can be safely withdrawn from your retirement portfolio.

T

 * TBM - Total Bond Market. When referred as a fund, such as Vanguard Total Bond Market Index Fund (VBMFX), the implication is for the U.S. bonds only.
 * TDA - "Tax-Deferred Annuity" or "Tax-Deferred Account".
 * TER - Total Expense Ratio. Expressed as a percentage. Primarily US. The term may be used in Europe and the United Kingdom, although the broadly equivalent OCF has now mostly replaced it.
 * TDF - Target Date Fund. A "fund-of-funds" which fulfills a complete asset allocation need. Recommended for simplicity. See also: Vanguard Target Retirement Funds, Glide paths
 * TIAA-CREF - Teachers Insurance and Annuity Association - College Retirement Equities Fund
 * TIPS - Treasury Inflation Protected Securities. Bonds issued by the U.S. Treasury. Interest and principal varies with inflation.
 * TISM - Total International Stock Market. When referred as a fund, such as the Vanguard - Total International Stock Index Fund (VGTSX), the implication is worldwide (global) stocks with the exception of the U.S. market.
 * TGH - Tax Gain Harvesting. A technique which uses gains from a taxable investment, e.g. stocks, to reduce income taxes due.
 * TINA - There Is No Alternative [to investing] . A less-than-ideal portfolio allocation, because other asset classes offer even worse returns.
 * TLA - Three Letter Acronym.
 * TLH - Tax Loss Harvesting. A technique which uses losses from a taxable investment, e.g. stocks, to reduce income taxes due.
 * TR - Target Retirement (see TDF above) or Total Return (The actual rate of return of an investment.)
 * TREA - TIAA Real Estate Account, ticker symbol is QREARX.
 * TSM - Total Stock Market. When referred as a fund, such as the Vanguard Total Stock Market Index Fund (VTSMX), the implication is for the U.S. stock market only.
 * TSP - Thrift Savings Plan. An employer retirement plan for U.S. government employees and U.S. military personnel.
 * TT - TurboTax. Tax preparation software by Intuit, Inc.

U

 * UCITS - Undertakings for the Collective Investment in Transferable Securities. An EU regulatory framework harmonizing fund management across Europe.
 * UIT - Unit Investment Trust. One of three basic types of U.S. investment companies.
 * USD - US Dollar

V

 * VA - Variable Annuity. An annuity (periodic payment) which fluctuates over time. It is very different from a Fixed SPIA and should only be considered under limited circumstances.
 * VBMFX, VFSVX, VFWIX, VTSMX, etc. - Ticker symbols for Vanguard mutual funds
 * VPW - Variable percentage withdrawal. A portfolio withdrawal method, a retirement planning approach, and a collection of related spreadsheets developed by members of the Bogleheads forum.
 * VEU, VNQ, VSS, VTI, VWO, etc. - Ticker symbols for Vanguard ETFs

W

 * WBS - World Bond Stock fund. A 2-fund portfolio used by academic William F. Sharpe for world-wide diversification. See: Retirement Income Analysis: A Two-fund Proxy for the World Bond Stock Fund
 * WEP - Windfall Elimination Provision. A reduction in Social Security benefits if you are also eligible for, or entitled to, a pension from earnings on which you did not pay Social Security tax. See: Social Security
 * WSJ - Wall Street Journal. A business and financial news publication. See: Wall Street Journal

Y

 * YMMV - Your Mileage May Vary. People may have a different opinion or experience. YMMV Definition in the Cambridge English Dictionary
 * YTD - Year to Date

Z

 * ZAR - South Africa Rand