Investment and Finance

Fixed income securities are securities that pay interest at set times at either fixed, floating or variable rates, or which are issued at a discount to their principal amount instead of making periodic interest payments. Fixed income securities include corporate bonds, debentures and other similar corporate debt instruments, zero coupon bonds and variable master demand notes.

Equity securities include common stocks, preferred stocks, securities convertible into common stocks, and rights and warrants to subscribe for the purchase of common stocks. Equity securities may be listed on a stock exchange or NASDAQ National Market System or unlisted.
Warrants are rights to purchase securities at a specified time at a specified price.

Money market instruments are high quality short term instruments including commercial paper, bankers' acceptance and negotiable certificates of deposit of banks or savings and loan associations, short term corporate obligations and short term US government obligations.

Interest rate risk is an increase in prevailing interest rates will cause fixed income securities held by a Mutual fund to decline in value. Longer term bonds are generally more sensitive to interest rate changes than shorter term bonds. Generally, the longer the average maturity of the bonds held by a mutual fund, the more the fund's share price will fluctuate in response to interest rate changes.

Foreign securities risk occurs because foreign securities are generally more volatile and less liquid than U.S. securities in part because of greater political and economic risks and less public information available about the foreign countries.
Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers.
The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.

These bonds refer to U.S. Government bonds. All U.S. government bonds are tax exempt on the state tax return. These bonds are tax deferred as well and earn interest for 30 years. You do not report the income until you turn the bonds in. They can be rolled into HH bonds. EE bonds are bought at half their face value.

HH U.S. government bonds are designed for people who want current income. The interest is paid semi-annually and is federally taxable. EE bond interest is tax deferred until cashed in.

You are limited to $10,000 a year.

The Expense ratio is the percentage of the assets that were spent to run a mutual fund as of the last annual statement. This includes expenses such as management and advisory fees, overhead costs and the 12b-1 distribution and advertising fees. The expense ratio does not include brokerage costs for trading the portfolio, although these are reported as a percentage of assets to the SEC by the funds in the Statement of Additional Information. The Statement of Additional Information is available to shareholders on request. Neither the expense ratio or the Statement of Additional Information includes the transaction costs of spreads, normally incurred in unlisted securities and foreign stocks. These two costs can add significantly to the reported expenses of a fund. The expense ratio is often termed as an Operating Expense Ratio.