CPA Fiaze Issa



A FAMOUS QUOTE
Where do you want to go today?
To Carpe Diem

DEFINITIONS AND COMMENTARY

American Depository Receipts (ADR)---This is a receipt issued by a United States depository which indicates shares owned of a foreign company. ADR's are priced in United States dollars. They trade like any other stock. However, if the company is not well-known, volume will be lacking. And low volume is not good.

Bond---These are IOU's issued by a company or the government. They are usually available in $1,000 or $5,000 denominations. Bonds/Bond funds should always be a part of a well-diversified portfolio.

Certificate of Deposit(CD)---A very conservative holding. This is a money market instrument issued by a bank. The bank pays principal and a fixed rate of interest at maturity. The average length of maturity is one year or 6 months, although much longer terms are available.

Common Stock---A security that represents ownership in a company.

Dollar Cost Averaging---A method used to buy securities over time at regular dollar intervals. This does not guarantee a profit. However, it guarantees that one will not be purchasing at the highest prices over time. This is the core foundation for any equity mutual fund purchase. For a bond fund, in general you do not have to follow this strategy because most short and medium-term bond funds have stable net asset values.

Equity---This is ownership in something. Bonds represent debt while stocks represent equity.
Government Bonds---This is debt of the Unites States Government. There are three types: Treasury Bills whose maturity is one year or less, Treasury Notes whose maturity is from two to ten years, and Treasury Bonds whose maturity is from eleven to thirty years. U.S. government debt is the safest debt to own!

Institutional Investors---Companies whose purpose is to invest their own assets or as trustee for someone else's assets. This would include pensions, mutual funds, and schools.

Municipal Bond---A bond issued by the government on the state or local level. These are good for people in high tax brackets.

Mutual Fund---A portfolio of stocks, bonds, or other investments which is governed by a team of one or more managers from an investment company who makes all the decisions regarding the fund.

Preferred Stock---A type of stock that has priority to common stock in payment of dividends and ownership issues. It has no voting rights like common stock does however.


AN ANSWER TO A FREQUENTLY ASKED QUESTION

QUESTION: Why do I need a CPA?

ANSWER: I have experience in topics from estate planning to stock selection. I am paid per hour and not on commission or fees. I also am not an owner or connected with any companies whose products or services I would recommend.Therefore, my income increases if you are happy.



I thank you for visiting my web site. If you have any comments, or suggestions,
please e-mail me at:
cpaissa@sbcglobal.net




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