Glossary
A snarky survival guide to the market buzzwords everyone pretends to understand.
New to income investing? Start with ETF, Dividend Yield, Distribution Rate, Expense Ratio, and Total Return.
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0DTE (Zero Days to Expiration)
Options that expire the same trading day. Prices and sensitivity can change rapidly, and positions can lose money quickly. Expiration timing does not guarantee a payment or profit.
1099-DIV
The tax form that shows dividends, qualified dividends, and capital gain distributions from stocks and funds. It is the love letter your broker sends to both you and the IRS.
A
ADR (American Depositary Receipt)
A certificate traded on a US exchange that stands for shares of a foreign company, so you can buy it in dollars through a US broker. Dividends are converted to dollars and may have foreign tax withheld before they reach you, and the depositary bank can deduct a small custody fee.
After-tax Yield
A yield estimate after modeled taxes. The result depends on tax character, account type, jurisdiction, and personal circumstances; it is not a guaranteed spendable amount.
Active ETF
An ETF whose manager chooses or adjusts holdings instead of simply following an index. Active management can react to markets, but it also adds manager risk and often costs more. Compare the strategy, track record, and expense ratio rather than assuming “active” means “better.”
Alpha
The slice of return that beats the benchmark after adjusting for risk. Everyone claims to generate it; the expense ratio usually eats most of it first.
Alpha Analysis
Dividend Vision's returns-based style test. It builds a copycat portfolio from plain index ETFs that behaves like a fund, then measures the return the fund earned beyond that recipe. Check the R² and out-of-sample result before calling the leftover return skill. See the nightly Alpha Rankings to compare analyzed funds.
APR (Annual Percentage Rate)
The yearly cost of borrowing, including interest and certain fees, without the effect of compounding. Loans quote APR; savings products quote APY, which counts compounding and so reads a little higher for the same stated rate.
APY (Annual Percentage Yield)
The yearly return on a savings account or CD including the effect of compounding. Because interest earns interest, APY is a little higher than the stated rate whenever interest is paid more than once a year. Money market funds and T-bill ETFs quote yields on their own conventions, so compare like with like.
Asset Allocation
How you split a portfolio across stocks, bonds, cash, and everything in between. It is the single biggest driver of your long-run results — and the decision most people spend the least time on.
Asset Class
A category such as equities, fixed income, commodities, or real estate. Diversification can occur within and across classes; its effect depends on weights, correlations, and the risks shared by the investments.
AUM (Assets Under Management)
The value of assets managed by a fund. AUM measures size, not trading liquidity or investment safety. Check bid-ask spreads, underlying-asset liquidity, fees, and current holdings separately; a larger fund does not guarantee lower costs or easier execution.
Authorized Participant (AP)
A large financial institution allowed to create or redeem ETF shares directly with the fund. APs help keep an ETF's market price close to its NAV; they are plumbing, not the person managing your portfolio.
B
Basis Point (bps)
One hundredth of a percentage point: 100 basis points (bps) = 1%. Fees and yield changes are quoted this way because small differences add up. An expense ratio that drops from 0.20% to 0.15% just fell 5 bps.
Bear Market
Wall Street's version of seasonal depression. Everyone's portfolio goes into hibernation while CNBC pundits explain how you should've sold three months ago.
Boomer Candy
Fancy ETFs that promise safety and monthly income by trading away upside. Basically dessert for retirees: sweet, predictable, and liable to rot your portfolio's teeth if you overdo it.
BDC (Business Development Company)
A public company that lends to or invests in smaller, private businesses and passes most of the income to shareholders. Example: owning a BDC can mean chunky dividends funded by private credit deals.
Beta
A historical estimate of return sensitivity to a chosen benchmark over a specified period. A beta below 1 does not guarantee low volatility, low drawdowns, or principal safety. Near-zero beta can simply mean weak market correlation; beta is not a daily leverage target.
Bid-Ask Spread
The gap between the highest price a buyer will pay and the lowest a seller will take. Wide spreads are a stealth tax on impatient traders—pay attention before you market-order a thinly traded ETF.
Bull Market
The financial equivalent of a conga line. Nobody knows where it's going, but everyone's convinced it'll last forever. Spoiler: it won't.
C
CAGR (Compound Annual Growth Rate)
The smoothed annual return that pretends your portfolio grew in a straight line. Reality was choppier, but it's the number marketing decks reach for when they need to sound impressive.
Call Option
A contract that gives the buyer the right—but not the obligation—to buy shares at a set strike price before expiration. Sellers collect premium and root for the stock to stay below the strike.
Call Overwriting
Selling calls against an existing investment to collect premiums. The written options can limit upside while the underlying investment retains downside. Premiums and distributions can change.
Calmar Ratio
A risk metric that compares annualized return to maximum drawdown. Higher means you earned more for the worst gut punch your portfolio took.
Capital Gains
The profit when you sell an investment for more than you paid. The IRS cares whether you held it long enough to earn the cheaper long-term rate.
Cash Flow Investing
Building a portfolio with the main goal of steady distributions instead of pure price growth. It is less adrenaline, more direct deposit vibes.
CEF (Closed-End Fund)
A fund that issues a fixed number of shares and trades on an exchange, often at a premium or discount to its NAV. Yields can be fat, distributions can be partly return of capital, and leverage under the hood is common—read the fact sheet twice.
Correlation
How closely two investments move together, from +1 (lockstep) to -1 (opposite directions). Diversification works best when correlation is low or negative, which is rarer than any pitch deck admits.
Cost Basis Methods
The accounting rules — FIFO, average cost, specific identification — that decide which shares you sold on paper, and therefore how big the tax bill is. Choosing the right lot is free money the default setting quietly leaves on the table.
Covers FIFO (first in, first out), LIFO (last in, first out), and HIFO (highest in, first out).
Covered Call
Selling a call option while owning the underlying shares. You get paid today and agree to sell tomorrow if the price rips higher.
Covered Call ETF
An ETF that holds stocks and sells calls on them for income. It can smooth cash flow, but the upside cap is real and so is the tax bill.
Creation and Redemption
The process authorized participants use to exchange a basket of securities for a large block of ETF shares, or reverse the trade. This mechanism expands or shrinks share supply, supports liquidity, and helps limit persistent premiums or discounts to NAV.
Compound Interest
The closest thing to legal sorcery. You do nothing, your money makes more money, and eventually you can brag about "letting time work for you" while still eating store-brand cereal.
Chowder Rule
Current dividend yield plus the five-year dividend growth rate, popularized by an online dividend investor of the same name. A quick sniff test for growth-plus-income — commonly benchmarked against 12% — not a law of nature.
CUSIP (Committee on Uniform Securities Identification Procedures)
A CUSIP is a unique 9-character alphanumeric identifier assigned to securities traded in the United States and Canada. It is used to precisely identify financial instruments such as stocks, ETFs, mutual funds, and bonds for clearing, settlement, and record-keeping purposes.
Think of it as a security's fingerprint. No two should match, and paperwork sleeps better because of it.
D
Delta
The option Greek that estimates how much an option price moves when the stock moves $1. It is the speedometer for how sensitive the option feels.
Distribution Rate
The annualized payout of a fund expressed as a percentage of its price. It looks like yield's twin, but it can include return of capital and other non-income payments—so read the fine print before you celebrate.
Distribution Frequency
How often a fund plans to pay distributions—typically weekly, monthly, quarterly, or annually. Frequency changes the timing of cash flow, not the economic return. A weekly payer is not automatically more profitable than a quarterly payer.
Distribution Safety Score™
Dividend Vision's rules-based 0–100 read on how safe a fund's payout looks. It starts at 100 and docks points for red flags like a falling or missed payout, NAV erosion, and a short track record — so you can see exactly what is dragging a score down. Yield draws a deduction only above a structure-specific extreme threshold: 8% for plain assets, 12% for BDCs, CEFs, MLPs, and REITs, and 40% for option-income funds.
Dividend Yield
The annual dividend divided by the share price. It is a quick snapshot of income, not a guarantee the checks keep coming.
Dividend Aristocrats
S&P 500 companies that have increased their dividend for at least 25 straight years. Example: these are the boring-but-consistent payers that keep hiking even in rough markets. Browse them all on the Aristocrats list.
Dividend Champion
Any U.S.-listed company with at least 25 straight years of dividend increases — the Aristocrat bar without the S&P 500 guest list, so mid-caps and small-caps get in on merit. Browse them all on the Champions list.
Dividend Contender
The 10–24 year tier of the dividend-streak ladder: long enough to prove management means it, young enough to still be raising fast. Where future Champions audition.
Dividend King
A company that has raised its dividend for 50 or more consecutive years — through every recession, rate cycle, and fad since the streak began. No index or size requirement; just endurance. Browse them all on the Kings list.
Diamond Hands
Slang for investors who refuse to sell through gut-wrenching volatility, keeping their grip thanks to long-run conviction. The phrase grew in online trading circles and pairs with the HODL mindset, but it can also mean riding a bad bet far too long.
Dollar-Cost Averaging
Investing a fixed amount on a schedule no matter the price, so you buy more shares when they are cheap and fewer when they are pricey. It swaps the fantasy of perfect timing for the sanity of autopilot.
Often shortened to DCA.
Dividend Sustainability
Whether a company or fund can keep paying its dividend without raiding the couch cushions. Look at cash flow, payout ratios, and whether the business is melting.
Dividend Coverage
A ratio comparing a defined earnings measure with distributions over matching dates. NII-only coverage excludes realized gains, so coverage below 100% does not by itself establish tax return of capital or an economic loss. Check the definition and the fund's financial and tax reports.
Dividend Cut
When a company or fund slashes its payout. It's the "we told you so" moment for anyone who ignored warning signs like stretched payout ratios, shrinking cash flow, or management's increasingly creative earnings decks.
Dividend Growth
The rate at which a company or fund raises its payout over time. A modest yield that grows 8% a year quietly laps a fat yield that never budges — compounding does not care about your first-year screenshot.
Declaration Date
The day a company or fund officially announces an upcoming dividend. It's the "save the date"; record and payment dates follow and determine who actually gets paid.
Downside Protection
Anything meant to soften losses when markets drop, such as hedges, cash buffers, or less aggressive positioning. It is a seatbelt, not a force field.
Drawdown
The peak-to-trough decline in an investment's value before it recovers. A 30% drawdown means you watched a third of your money vanish and had to trust it would come back. Max drawdown is the worst one on record.
Maximum drawdown is often shortened to MDD.
Duration
A bond portfolio's sensitivity to interest-rate changes, measured roughly in years. A duration of six suggests the price may fall about 6% if rates rise one percentage point, or rise about 6% if rates fall, all else equal. It is sensitivity, not a maturity date.
Diversification
Putting your eggs in different baskets so when one gets stolen, at least the omelet still happens. The financial world's way of saying "don't be stupid."
DRIP
Dividend Reinvestment Plan. When you're so committed to compounding that you turn every payout into more shares instead of pocket money. Click through if you actually want to learn how to run that flywheel.
E
EAFE (Europe, Australasia, and Far East)
MSCI's index of large and mid-sized companies in developed markets outside the US and Canada, such as Europe, Japan, and Australia. EFA and IEFA track EAFE-based indexes. It leaves out emerging markets like China and India.
ELN (Equity-Linked Note)
A debt instrument whose payoff is tied to a stock, index, or options strategy. Some income ETFs use ELNs to package option exposure. Along with market risk, investors take counterparty risk: the note is only as reliable as the institution that issued it.
EMA (Exponential Moving Average)
A moving average that weights recent closes more heavily than older ones, so it turns faster than an SMA of the same length. That cuts both ways: it catches a new trend sooner and gets faked out by short swings more often. The 12- and 26-day EMAs are the inputs to MACD. Each day's weight is 2 ÷ (N + 1) for an N-day EMA, so the newest close counts most and older ones fade out gradually rather than dropping off a cliff.
EPS (Earnings Per Share)
A company's net profit divided by its shares outstanding. It is the "E" in the P/E ratio and the pool dividends are paid from, so a dividend that grows faster than EPS for years pushes the payout ratio up and deserves a closer look.
ETN (Exchange-Traded Note)
An unsecured debt note issued by a bank that trades like a stock and pays a return tied to an index or strategy. Unlike an ETF, it holds no underlying assets on your behalf: if the issuing bank fails, the note can lose value no matter how the index did, and the issuer can sometimes call or delist it early.
Expense Ratio
Annual fund operating expenses expressed as a percentage of average net assets. Expenses reduce fund assets and are already reflected in reported net fund returns; do not subtract them twice. Compare current net and gross ratios and any waiver expiry. Equal distribution yields do not imply equal gross returns, so a fee difference alone cannot predict the net-return difference.
Often shortened to ER.
ETF Tax Treatment
How an ETF's distributions are taxed based on what it owns and how it operates. Most issue 1099s, but some strategies can kick out ordinary income or capital gains.
Ex-Dividend Date
The cutoff day for dividend eligibility. Buy on or after this date and you miss the upcoming payout. Example: buy the day before ex-date, and you still collect the next dividend.
ETF
An investment burrito stuffed with random securities. Sometimes delicious, sometimes it gives you indigestion, but hey, at least it's portable.
F
FDIC (Federal Deposit Insurance Corporation)
The US agency that insures bank deposits (checking, savings, CDs, and money market deposit accounts) up to $250,000 per depositor, per insured bank, per ownership category. It does not cover stocks, bonds, ETFs, or money market funds, even when you buy them through a bank. Brokerage accounts fall under SIPC instead.
Forward P/E Ratio
Share price divided by next year's expected earnings. Handy for judging a stock against its sector; only as honest as the analyst estimates underneath it.
Free Cash Flow (FCF)
The cash left over after running and maintaining the business — the money dividends are actually paid from. Earnings are an opinion; free cash flow is a bank balance.
FTSE
FTSE Russell, the index provider owned by the London Stock Exchange Group and pronounced "footsie." Its developed, emerging, and all-world indexes sit behind many Vanguard international funds, and it also runs the Russell US indexes, including the Russell 2000.
Fund Age / Seasoning
How long a fund has been trading. New funds lack the track record to prove their strategy actually works outside a PowerPoint deck. Generally, two or three years of real data separates "interesting pitch" from "investable product."
Fund Overlap
When two or more ETFs in your portfolio hold the same underlying stocks. You think you're diversified, but your portfolio is just three trench coats sharing one body.
G
Gamma
The option Greek that measures how quickly delta changes as the underlying moves. High gamma means the position's sensitivity can flip on you fast—great near expiration if you're right, ugly if you're wrong.
Growth vs. Income
The eternal investing tug-of-war: growth chases price appreciation while income chases steady cash flow. Most dividend investors land somewhere in the middle and argue about it online.
H
Hedge
A position taken to offset potential losses somewhere else in your portfolio. A real hedge costs something up front; a "hedge" that costs nothing is usually just another directional bet wearing a disguise.
HODL
Crypto slang that turned into a buy-and-hold battle cry. It pushes long-term conviction during wild price swings and shrugs off panic selling, for better or for worse.
I
Implied Volatility
The volatility input implied by an option's market price under a pricing model. It is not a guaranteed forecast. A gap between implied and realized volatility does not by itself establish a seller's profit after price direction, hedging, and costs.
Often shortened to IV.
Income Investing
Focusing on assets that pay you regularly, like dividends, interest, or option income. The goal is more cash flow and fewer sweaty palms.
Index Fund
A fund that tracks a rules-based basket instead of trying to pick winners. Boring by design, which is exactly why it quietly beats most active managers over long stretches.
Issuer Concentration
How much of your portfolio is managed by a single fund company. Owning five JPMorgan ETFs isn't diversification, it's brand loyalty with extra steps.
Inception Date
The date a fund first started trading. Younger funds have less history to judge, so an early inception date is like a long resume—not a guarantee, but reassuring.
J
Junk Bond
A bond rated below investment grade, paying a higher yield because the issuer is more likely to ghost you on repayment. High income, high drama.
K
K-1
A tax schedule reporting an owner's share of partnership or other pass-through items. Direct MLP ownership commonly involves Schedule K-1, while many energy and MLP funds issue Form 1099. Verify the actual security's reporting rather than inferring it from the industry.
KPI (Key Performance Indicator)
A headline number that summarizes how something is doing. On Dividend Vision, KPIs are the small metric tiles across the top of the Dashboard, Holdings, and similar pages — Estimated Current Value, Invested, Cash, Est. Monthly Average, and so on. Each tile is one number for whatever that page is showing. Add, remove, or reorder them from the gear on the strip; see What is a KPI? on the Help page.
L
Leveraged ETF
A fund that uses derivatives or borrowing to target enhanced exposure, often a stated multiple of a benchmark's daily return. Over longer periods, compounding and costs can produce a different result from that multiple of the benchmark's cumulative return. Gains and losses can be amplified.
Liquidity
How fast you can turn an asset into cash without looking like you're pawning grandma's heirlooms. High liquidity means tight bid-ask spreads and enough volume to exit gracefully; low liquidity means every trade moves the price against you.
M
M2 Money Supply
A broad measure of money that includes cash, checking deposits, and easily accessible savings instruments. Think of it as the economy's wallet plus the couch cushions—full until someone remembers all those impulse buys.
Managed Distribution Policy
A fund policy targeting a distribution amount or rate. Payments can include investment income, gains, or tax return of capital, and the policy can change. A target payment does not guarantee earnings or principal preservation.
MLP (Master Limited Partnership)
A publicly traded partnership, often in energy infrastructure, that passes through most of its cash flow to investors. Example: MLPs can pay high distributions but usually send a K-1 at tax time.
An ETF designed to distribute income every month. It is for people who want a regular paycheck cadence instead of waiting for quarterly surprises.
Moving Average
The average closing price over a set number of recent trading days, recalculated every day so the line "moves" along the chart. It smooths out daily noise to show which way the trend is heading. It describes where price has been, not where it is going. Common windows are 20, 50, and 200 days, and the two main flavors are the equal-weighted SMA and the faster-turning EMA version.
MSCI
An index provider whose benchmarks, such as MSCI EAFE, MSCI Emerging Markets, and MSCI USA, sit behind many international and factor ETFs. When a fund's name includes "MSCI," it is telling you whose rulebook picks its holdings.
N
Nasdaq-100 (NDX)
An index of the 100 largest non-financial companies listed on the Nasdaq, weighted by market value and tilted heavily toward technology. NDX is the index's own ticker. QQQ is the best-known fund that tracks it, and many covered call income ETFs sell options on it.
Net Investment Income (NII)
Interest, dividends, and similar investment income left after fund expenses. For bond funds and CEFs, comparing NII with distributions helps show whether recurring portfolio income covers the payout. It does not include every possible source of a distribution.
NAV (Net Asset Value)
Fund assets minus liabilities, divided by shares outstanding. NAV differs from the market price at which investors buy or sell shares. Compare both as of matching dates.
NAV Erosion
A decline in net asset value over time. Market losses, expenses, and distributions can all affect NAV. Assess distribution-adjusted total return and fund reports before attributing a decline to an unsustainable payout.
NAV Trend
The direction of a fund's net asset value over a stated period. A rising NAV does not guarantee a sustainable payout, and a falling NAV alone does not identify the tax character or source of distributions.
O
Option Premium
The cash you receive for selling an option. It feels like found money until you remember you sold someone a promise.
Omega Ratio
A performance measure that compares gains above a target return to losses below it. The higher it is, the more upside you got relative to the downside drama.
Ordinary Income
Income taxed at your regular rate, like interest or many option distributions. It is the opposite of the fancy lower tax brackets.
Order Types
Market, limit, stop, trailing stop — the instructions that tell your broker how to fill a trade. A market order says just get me in; a limit order says only at my price or better. It is the cheapest insurance in investing.
P
P/E Ratio (Price-to-Earnings)
Share price divided by earnings per share. A trailing P/E uses the last 12 months of reported earnings, and a forward P/E uses next year's estimates. A low P/E can mean a bargain or a business the market expects to shrink. The number alone never tells you which.
Also written PE ratio.
Passive Income (Investing Context)
Money you earn without clocking in, like dividends or interest. It is passive only after you do the active work of picking the right assets.
Payout Ratio
The share of earnings or cash flow a company uses to pay dividends. A ratio above 100% means the company is paying more than it earns—fun at parties, unsustainable long-term.
Payment Date
The issuer's scheduled date for paying a declared dividend. It is distinct from the ex-date and record date. Check your broker's transaction record for when your account was actually credited; an estimated calendar date is not proof of receipt.
Paper Hands
Trading slang for someone who bails at the first whiff of red, locking in losses out of fear. It is often used in crypto and meme-stock chatter to call out shaky conviction and missed rebounds.
Premium/Discount to NAV
The gap between a fund's market price and its net asset value. ETFs usually trade within a hair of NAV thanks to the creation/redemption mechanism; CEFs can swing wildly above or below, and that spread is half the game.
Put Option
A contract that gives the buyer the right—but not the obligation—to sell shares at a set strike price before expiration. Buyers use them as insurance; sellers collect premium hoping the stock stays above the strike.
Q
Qualified Dividends
Dividends that meet IRS rules and get taxed at lower long-term capital gain rates. They are the polite, well-dressed dividends that behave.
Reported as qualified dividend income (QDI).
R
Record Date
The date an issuer uses to determine shareholders of record for a distribution. Investors should check the announced ex-dividend date and any special due-bill arrangements to determine entitlement; record date alone is not a trading cutoff.
Reverse Split
When a company or fund combines shares to raise the price per share. It fixes the look, not the underlying problem.
Required Minimum Distributions (RMDs)
The withdrawals the IRS forces out of your tax-deferred accounts once you hit the trigger age, whether you want the cash or not. Skip one and the penalty is eye-watering — Uncle Sam wants his deferred taxes back.
REIT (Real Estate Investment Trust)
A company that owns or finances income-producing real estate and distributes most of its earnings. Example: a REIT can pay steady dividends funded by rent checks.
Retirement
The last stop before Valhalla, where you move to Florida and become a shuffleboard champion the likes of which the SeaShell Villages have never seen. Also known as: "When your boss finally becomes someone else's problem."
Risk-adjusted Return
The return you get after accounting for how wild the ride was. It is the reason a boring strategy can beat a rollercoaster on a quality-of-life basis.
R-Squared
How much of a fund's movement its benchmark actually explains, from 0 to 100%. A low R-squared means its beta and alpha are mostly noise — the fund is off doing its own thing, for better or worse.
Also written R² or R2.
Return of Capital (ROC)
A nondividend distribution for tax purposes that generally reduces cost basis; amounts beyond zero basis generally create capital gain. Tax ROC alone does not establish an economic loss or identify the cash source. Use final tax reporting and compare net total return separately.
Russell 2000 (RTY)
An index of roughly 2,000 small US companies, the smaller end of the Russell 3000. RTY is the index's own ticker and IWM is the best-known fund tracking it. Small caps tend to swing harder than the S&P 500, which is why small-cap option-income ETFs can pay rich premiums.
S
S&P 500 (SPX)
An index of about 500 large US companies, weighted by market value and maintained by S&P Dow Jones Indices. SPX is the index's own ticker. You cannot buy it directly, but funds like SPY, IVV, and VOO track it. It is the benchmark most US stock funds are measured against, and the Dashboard's Market Trend gauge reads its trend through SPY.
Safety-Adjusted Yield
Dividend Vision's yield figure adjusted using its distribution-risk score. It is a research metric, not a guaranteed income rate or proof of capital safety. Review input completeness, the scoring method, and distribution history.
SEC Yield
A standardized annualized measure of net investment income over a specified period, commonly 30 days for funds. It is not a payout forecast. Option-related amounts and gains may be excluded, so the gap from distribution rate does not by itself measure return of capital.
Section 199A
A provision allowing eligible taxpayers a deduction of up to 20% for qualifying business income and certain qualified REIT dividends and publicly traded partnership income, subject to limits. Not every REIT or partnership payment qualifies; use final tax documents.
Sequence of Returns Risk
The danger that the order of investment gains and losses hurts long-term results, especially when you're withdrawing money. It's like eating your fries before the burger only to realize the burger's burnt—you're stuck with the aftertaste.
Sharpe Ratio
A risk-adjusted return score that compares excess return to volatility. Higher means you got paid more for the stress.
SIPC (Securities Investor Protection Corporation)
A nonprofit that restores missing customer securities and cash, up to $500,000 including a $250,000 cash limit, when a member brokerage firm fails. It does not protect against investment losses: if your ETF falls, SIPC does not make you whole. Bank deposits are covered by the FDIC instead.
SMA (Simple Moving Average)
A moving average that adds up the last N closing prices and divides by N, so every day in the window counts equally. The 50- and 200-day SMAs are the classic trend lines, and the Dashboard's Market Trend gauge reads the S&P 500 (SPY) regime from its 20/50/200-day SMAs. Slower to turn than an EMA of the same length. On the gauge, Risk-On means the SMAs are stacked 20 above 50 above 200 with SPY above the 20-day, and Risk-Off means SPY has fallen below the 200-day.
Sortino Ratio
Like Sharpe, but it only counts downside volatility. It rewards strategies that keep the bad days quiet while still delivering returns.
SPDR
State Street's family of ETFs, pronounced "spider." The name comes from Standard & Poor's Depositary Receipts, the structure behind SPY, the S&P 500 fund launched in 1993 and widely credited as the first US-listed ETF. Sector funds like XLE and XLU are SPDRs too.
Staking Yield
The reward for locking up crypto to help run a blockchain, quoted like an interest rate. It can look juicy, but the payout, the token price, and the lockup terms can all turn on you at once.
Standard Deviation
The classic gauge of how far returns scatter around their average. Higher means a bumpier ride, and it is the raw ingredient behind Sharpe ratios, volatility figures, and most risk stats you will ever meet.
Strike Price
The price at which an option contract can be exercised. Above it for calls, below it for puts, is where the math (and the assignment risk) actually matters.
SWAN (Sleep Well At Night)
Investor shorthand for a holding or portfolio you can own through a crash without losing sleep: steady, well-covered payouts, shallow drawdowns, a low beta, and often a long dividend-growth record like the Dividend Aristocrats. It is a description, not a rating, and it means different things for a retiree living on the income and a saver reinvesting it. On Dividend Vision, a high Distribution Safety Score™, a moderate yield (an outsized one is often a yield trap), and a small max drawdown are reasonable places to start: open this as a screen. Not to be confused with the ticker SWAN, an Amplify hedged-equity ETF.
Read the Sleep Well At Night investing guide for dated fund examples, payout-risk checks, and portfolio concentration limits.
T
Tax-Equivalent Yield
The taxable yield needed to match a tax-exempt investment after federal or state taxes. Divide the tax-exempt yield by one minus your marginal tax rate. It is useful for comparing municipal-bond income with taxable bonds, but your actual tax situation matters.
Tail Risk
The odds of a rare, brutal move that tidy models swear almost never happens — right up until it does. It is why once-in-a-century crashes keep showing up every decade or so.
Tax Drag
The performance loss from paying taxes along the way. High turnover strategies can feel like running with a parachute.
Tax Loss Harvesting
Selling investments at a loss to offset taxable gains, then reinvesting to stay allocated. It is the portfolio version of turning lemons into a tax break.
Often shortened to TLH.
Tax-efficient Investing
Choosing assets and strategies that minimize taxes so more of your return stays yours. It is the difference between gross and actually getting paid.
Theta
The option Greek that measures time decay. It's the daily rent the clock charges an option holder just for owning a contract that hasn't moved yet—and it accelerates near expiration.
TIPS (Treasury Inflation-Protected Securities)
US Treasury bonds whose principal adjusts with the Consumer Price Index, so the principal and the interest paid on it rise with inflation. The yearly inflation adjustment is taxable even though you do not receive it until maturity, which is why many investors hold TIPS in tax-advantaged accounts or through a fund.
Total Return
The full return on an investment, including price change and all distributions reinvested. On Dividend Vision, Fund Total Return is that one-share path (fund performance, not your money-weighted account return). My Position Return is what you made on what you paid. Assumed Annual Return is a Forecast growth assumption. Pure yield figures are easy to game; fund total return is the number to compare across strategies.
Tracking Error
The variability of a fund's return difference from its benchmark. It differs from tracking difference, which measures the return gap over a period. Check benchmark, measurement frequency, and fees when comparing funds.
Treynor Ratio
Return earned per unit of market risk (beta) instead of total risk. It rewards strategies that wring return out of their market exposure rather than just piling on more of it.
TTM (Trailing Twelve Months)
The most recent 12 months of data, rolled forward as new data arrives. A TTM yield adds up the distributions paid over the past year and divides by today's price, so it shows what a fund actually paid rather than what it might pay next.
Turnover
A measure of portfolio purchases and sales relative to assets over a period. High turnover can add trading costs and affect tax outcomes, but does not alone determine the tax bill. ETF structure, realized gains and losses, and account type matter.
U
UBTI (Unrelated Business Taxable Income)
Income a tax-exempt account such as an IRA earns from an active business rather than from investing, most often from MLP units held directly. If UBTI in an IRA tops $1,000 in a year, the account itself may owe tax and have to file a return. MLP funds and ETNs generally do not pass UBTI through.
Upside Cap
The maximum gain you can earn in a strategy like covered calls. You take the premium and agree to stop winning after a certain point.
Ulcer Index
A risk measure that focuses on depth and duration of drawdowns, not just volatility. Lower is better because your portfolio spent less time in pain.
V
Value at Risk (VaR)
A statistical stab at the most you would expect to lose over a set stretch at a given confidence level — say, 95% of days you will not drop more than 2%. Reassuring, until the other 5% shows up and blows past it.
Vega
The option Greek that measures sensitivity to implied volatility. When the market gets jumpy, vega is what makes option prices jump with it—regardless of whether the stock itself has moved yet.
VIX (Cboe Volatility Index)
The options market's estimate of how much the S&P 500 will swing over the next 30 days, often called the market's "fear gauge." It usually jumps when stocks fall. You cannot buy the VIX itself; VIX funds hold futures and can drift far from the index over time. Option-selling income ETFs tend to collect richer premiums when it is high.
Volatility
How much prices swing around. High volatility means bigger moves, higher drama, and more potential for both profits and ulcers.
Volatility Harvesting
Strategies that try to monetize price swings, often by selling options. It is paid for absorbing other people's chaos.
W
Wash Sale
Selling at a loss and acquiring substantially identical securities within 30 days before or after the sale can disallow the current deduction. Replacement shares, options, related accounts, and retirement accounts can affect the treatment; check the full IRS rules.
An ETF structured to pay distributions every week. It is for investors who want income faster than the calendar usually allows.
Withdrawal Rate
Withdrawals expressed as a percentage of portfolio value. The classic 4% guideline models an initial withdrawal followed by inflation adjustments under specific historical assumptions; it is not a guaranteed return or a promise that savings will last.
A safe withdrawal rate is often shortened to SWR.
X
XIRR
The spreadsheet formula that calculates an annualized return on cash flows with irregular dates. It's what you reach for when dollar-cost averaging and uneven contributions break a plain percentage calculation.
XIRR is the internal rate of return (IRR) for cash flows on irregular dates.
Y
Yield Trap
A sky-high yield that lures you in right before the dividend gets cut or the price falls. It is the financial version of a too-good-to-be-true deal.
Yield on Cost
Current annual payout divided by your cost basis — labeled Income Yield on My Cost in tables. It does not include price gain/loss and is not Fwd Dist. Rate (income ÷ today's price). Backward-looking; not a reason to hold or sell. Example: a stock bought at $50 paying $3 a year has a 6% income yield on your cost, even if it trades at $75 now.
Often shortened to YOC.
YoY (Year-over-Year)
A comparison of one period with the same period a year earlier, such as this quarter's dividend against the same quarter last year. It sidesteps seasonal patterns that a month-to-month comparison would mistake for a trend.
YTD (Year-to-Date)
The stretch from January 1 of the current year to today. A YTD return shows how an investment has done so far this calendar year, so in January it covers a few weeks and in December nearly a full year. Compare funds over the same window before reading much into it.
Z
Zero-Coupon Bond
A bond sold at a discount that pays no coupons, just a lump sum at maturity. You earn "income" via price appreciation, except the IRS still taxes the imputed interest every year—phantom income with a real tax bill.