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Assets
Anything owned that has monetary value or can be exchanged for monetary value (for example, a house or car).

Capital
Money available for investment purposes.

Capital Gain (or Loss)
An increase (or decrease) in value, for example, of a stock or mutual fund, resulting from favorable (or unfavorable) investment performance. This may also be expressed as appreciation (or depreciation).

Diversification
Spreading your money among different kinds of investments such as stocks, bonds, or cash equivalents.

Dividend
A payment to shareholders which represents their share of a fund's or a company's earnings available for distribution.

Earnings
A company's or fund's profit after paying all costs, expenses, and taxes.

Expense Ratio
A ratio for comparing an investment option's efficiency by dividing its expenses by its net assets.

Growth Investment Option
A portfolio with growth or capital appreciation as its primary goal or companies that reinvest most of their earnings for expansion, research, or development.

Income
Interest or dividends earned from an investment. Income is automatically reinvested in a participant's plan account.

Index
A benchmark against which financial or economic performance may be measured, such as the S&P 500 or the Consumer Price Index.

Investment Objective/Goal
A statement of the goals an investment option wants to achieve through its investments. Generally, investors match their financial objectives with investment options that have similar goals, balanced with an investor's risk tolerance.

Liquidity
A market is liquid when it has a high level of trading activity, allowing buying and selling with minimum price disturbance. A liquid asset is easily turned into cash.

Market Capitalization (Market Cap)
The current value or price of a stock multiplied times the number of shares outstanding. For example, if a company has 10,000,000 shares available and the price is $50 per share, market cap is $500,000,000. Typically, small-cap is defined as $1 billion or less; mid-cap as $1 to $5 billion; and large-cap as $5 billion or more.

Price-to-Earnings (P/E) Ratio
The most common measure of how expensive a stock is. Equal to a stock's capitalization divided by its after-tax earnings over a 12-month period.

Price-to-Book (P/B) Ratio
The ratio of stock price to per share stockholder's equity.

Principal
The original amount invested, not counting interest or dividends on that amount.

Total Return
The profit or loss on an investment over a specific period of time. Total return includes income and share price appreciation and depreciation. Total return assumes that all dividends and capital gains paid during the period are reinvested to buy additional shares.

Value Investment Option
A portfolio seeking to buy stocks that are at a discount to their 'fair value' and sell them at or in excess of that value. Often a value stock has a low price-to-book (P/B) ratio.

Volatility
A measure of price or interest rate fluctuations over a given period of time.