Abbreviations and Acronyms
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Below are brief descriptions to assist new investors. A glossary of words relevant to investing concepts can be found here.
- 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
- 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
- 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.
- 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.
- EAFE - Europe, Australia and Far East. A regional equity grouping. See: Domestic/International
- EBITA - Earnings Before Interest, Taxes and Amoritization
- ECI - Effectively Connected Income. Classification of US source income paid to nonresident aliens. See: Nonresident alien taxation
- 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
- 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.
- FDAP - Fixed, Determinable, Annual, Periodical. Classification of US source income paid to nonresident aliens. See: Nonresident alien taxation
- 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™ 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 Bogleheads® forum topic: .
- 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
- 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.
- 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
- 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.)
- JPY - Yen
- KISS - Keep It Simple, Stupid
- KYC - Know Your Customer. Alternatively, Know Your Client.
- 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
- 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
- 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
- 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).
- 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.
- 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)
- 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
- 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:
- 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.
- 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.
- 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
- 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
- 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
- YMMV - Your Mileage May Vary. People may have a different opinion or experience. YMMV Definition in the Cambridge English Dictionary
- YTD - Year to Date
- ZAR - South Africa Rand
- Bogleheads® forum post: , ResearchMed. May 05, 2022
- Acronyms and Slang Frequently Used on the Early Retirement Forum