Investment Terms Starting with “T”
1. Treasury Bond
A Treasury Bond is a long-term debt security issued by a government to raise funds. It pays fixed interest and is considered a low-risk investment.
Illustration: An investor buys a 20-year Treasury Bond and receives interest every six months.
2. Treasury Bill (T-Bill)
A Treasury Bill is a short-term government security sold at a discount and redeemed at face value upon maturity.
Illustration: Buying a $1,000 T-Bill for $970 and receiving $1,000 at maturity.
3. Treasury Note
A Treasury Note is a medium-term government bond that pays fixed interest until maturity.
Illustration: A 10-year Treasury Note provides semiannual interest payments.
4. Total Return
Total return is the complete profit from an investment, including capital gains, dividends, and interest.
Illustration: A stock gains 10% in price and pays a 3% dividend, producing a 13% total return.
5. Technical Analysis
Technical analysis studies price charts and trading volume to predict future market movements.
Illustration: Traders use moving averages and RSI to identify buying opportunities.
6. Taxable Income
Taxable income is the portion of income subject to taxation after allowable deductions.
Illustration: Investment gains may increase taxable income.
7. Tax-Deferred Investment
A tax-deferred investment allows taxes on earnings to be postponed until money is withdrawn.
Illustration: Retirement accounts often provide tax-deferred growth.
8. Tax-Loss Harvesting
Tax-loss harvesting involves selling investments at a loss to reduce taxable capital gains.
Illustration: An investor offsets stock gains by selling a losing investment.
9. Target-Date Fund
A target-date fund automatically adjusts its investment mix as a specified retirement year approaches.
Illustration: A 2055 target-date fund gradually shifts from stocks to bonds.
10. Time Horizon
Time horizon is the length of time an investor plans to hold investments before needing the money.
Illustration: Retirement investing usually involves a long time horizon.
11. Time Value of Money (TVM)
The time value of money states that money available today is worth more than the same amount received in the future because it can earn returns.
Illustration: Investing $1,000 today allows it to grow through compounding.
12. Trade
A trade is the purchase or sale of a financial security.
Illustration: Buying 100 shares of a company completes one trade.
13. Trader
A trader actively buys and sells investments to profit from short-term price movements.
Illustration: Day traders may execute multiple trades during one trading session.
14. Trading Volume
Trading volume measures the number of shares or contracts traded during a specific period.
Illustration: High trading volume often indicates strong investor interest.
15. Trend
A trend is the general direction in which an investment’s price moves over time.
Illustration: A stock consistently making higher highs is in an upward trend.
16. Trend Line
A trend line is a chart line connecting price highs or lows to identify market direction.
Illustration: Traders draw trend lines to identify support and resistance.
17. Tracking Error
Tracking error measures how closely an investment fund follows its benchmark index.
Illustration: A lower tracking error indicates better index replication.
18. Trailing Stop Order
A trailing stop order automatically adjusts with rising prices to protect profits while limiting downside risk.
Illustration: A trailing stop follows a stock upward but sells if it falls by a preset percentage.
19. Turnover Ratio
Turnover ratio measures how frequently a fund buys and sells its investments during a year.
Illustration: Higher turnover may result in increased transaction costs.
20. Tangible Asset
A tangible asset is a physical asset with measurable value, such as real estate or machinery.
Illustration: Gold and commercial buildings are tangible assets.
21. Total Asset
Total assets represent everything a company owns with measurable economic value.
Illustration: Cash, inventory, equipment, and buildings are included in total assets.
22. Total Liability
Total liabilities are all financial obligations owed by a company or individual.
Illustration: Loans, accounts payable, and bonds are total liabilities.
23. Top-Line Growth
Top-line growth refers to an increase in a company’s revenue before expenses.
Illustration: Revenue rises from $50 million to $60 million year-over-year.
24. Treasury Yield
Treasury yield is the annual return investors earn from government Treasury securities.
Illustration: Rising Treasury yields often influence stock and bond prices.
25. Total Expense Ratio (TER)
TER measures the annual operating costs of managing an investment fund.
Illustration: A fund with a 0.60% TER charges $60 annually for every $10,000 invested.
26. Thin Market
A thin market has relatively few buyers and sellers, resulting in lower trading activity.
Illustration: Small-cap stocks often trade in thin markets.
27. Total Market Index
A total market index tracks nearly all publicly traded companies within a stock market.
Illustration: Investors use total market index funds for broad diversification.
28. Tender Offer
A tender offer is a public proposal to purchase shares from existing shareholders, usually at a premium.
Illustration: A company offers $55 per share when the market price is $50.
29. Trust Fund
A trust fund is a legal arrangement where assets are managed for beneficiaries according to specified terms.
Illustration: Parents establish a trust fund to finance their children’s education.
30. Tracking Stock
A tracking stock is a special class of shares whose value reflects the performance of a specific division within a company.
Illustration: A conglomerate issues tracking stock tied only to its technology business.