Abbreviations and acronyms
Below are brief descriptions of some abbreviations and acronyms, to help new investors. For a glossary of words relevant to investing, see: Glossary.
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 - Australian 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 - Canadian 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.
- CRT - Charitable Remainder Trust. A type of trust containing an inherited IRA allowing a beneficiary a lifetime stretch with a residual going to a designated charity.
- CUSIP - A code that identifies a North American financial security, derived from Committee on Uniform Security Identification Procedures. See: CUSIP.
D
- DAF - Donor Advised Fund. A charitable investment account for the sole purpose of supporting charitable organizations.
- 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
- ECI - Effectively Connected Income. Classification of US source income paid to nonresident aliens. See: Nonresident alien taxation.
- EDB - Eligible Designated Beneficiary. Class of inherited IRA, 401k, Roth, or other qualified retirement account beneficiary eligible to take (stretch) required minimum distributions (RMDs) over their lifetimes.
- 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; that is, you cannot "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.
- ESOP - Employee Stock Ownership Plan
- 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.
- 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. From Eugene F. 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. Also, Financial Independence.
- Fido - Jocular nickname for Fidelity Investments
- FIFO - First-In, First-Out
- FIRE - Financial Independence / Retire Early. Colloquial acronym.
- FIRPTA - Foreign Investment in Real Property Tax Act. Taxes US real estate gains realised by nonresident aliens at income tax rates.
- FOMO - Fear Of Missing Out. An investor behavior where fear of inaction will miss an investment opportunity. See Bogleheads forum topic: "How do Bogleheads cope with FOMO? [Fear Of Missing Out]".
- 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.
- 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.[1]
- 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.
- IP PIN - Identity Protection PIN. A 6-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number (SSN) on fraudulent federal income tax returns.
- 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 - Japanese 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 - 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 Bogleheads forum post: "Market fluctuation in late 2008".
- MPT - Modern Portfolio Theory. Diversify your assets to minimize risk to your investments. Also see: Modern portfolio theory.
- 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 -
- Required Beginning Date. Used by the Internal Revenue Service to designate the latest date on which an IRA, 401k, or qualified retirement account owner must start required minimum distributions (RMDs).
- Really Bad Day. A Bogleheads' idiomatic term coined by forum member livesoft. An early mention is in Bogleheads forum topic: "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 John 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:
- 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 to as a fund, such as Vanguard Total Bond Market Index Fund (VBTLX), 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, and 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 (VTIAX), 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, for example 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, for example 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 (VTSAX), 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.
- VBTLX, VGSLX, VTIAX, VTSAX, ... - 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, VXUS, ... - 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. See: YMMV Definition in the Cambridge English Dictionary.
- YTD - Year to Date
Z
- ZAR - South African Rand
References
- ↑ Bogleheads forum post: "Re: IANYL :: Can we please add this to the wiki", ResearchMed. May 05, 2022
External links
- Acronyms and Slang Frequently Used on the Early Retirement Forum
- Bogleheads forum post: "Re: Bookmarklet to lookup selected word in wiki's abbreviation table", LadyGeek. September 3, 2020 - Create a bookmark using the JavaScript described in the topic. Highlight the acronym, then click on the bookmark. This page will appear in a pop-window pointing to the acronym's definition.
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