Glossary

This index looks at companies and commodities that are changing and effecting our bodies either through food, medicine or healthcare. This index looks at staples like sugar, soybeans, corn, cattle, and hogs as well as holding companies like Monsanto, Potash Corp., Tyson Foods, Johnson & Johnson, Pfizer, Amgen, Biogen Idec, Wellpoint.

An algorithm is an effective method for solving a problem using a finite sequence of instructions.

This is a bearish market index, it expects the market to move down and is net short. It is also the most leveraged of all of our indexes, usually reflecting moves -5X of the S&P500. The index shorts S&P along with financial, oil & gas, real estate, emerging markets, and foreign EAFEⁱ markets. Short and leveraged positions are achieved through futures contracts and swap agreements.

The KBW Bank Sector (BKXⁱ) is a capitalization-weighted index composed of 24 geographically diverse stocks representing national money center banks and leading regional institutions

This index and term refer to 4 countries - Brazil, Russia, India, and China. This quartet is commonly seen as containing the leaders of global growth.

The French stock market index that tracks the 40 largest French stocks based on market capitalization on the Paris Bourse (stock exchange). The CACⁱ 40 is used as a benchmark index for funds investing in the French stock market and also gives a general idea of the direction of the Paris Bourse. The CAC 40 is similar to the Dow Jones Industrial Average in that it is the most commonly used index that represents the overall level and direction of the market in France.

The money, property, and other valuables which collectively represent the wealth of an individual or business.

A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

Commodity Research Bureau Index measures the overall direction of commodity sectors. The CRBⁱ was designed to isolate and reveal the directional movement of prices in overall commodity trades.

A stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAXⁱ Index come through Xetra, an electronic trading system. A free-float methodology is used to calculate the index weightings along with a measure of average trading volume.

Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.

U.S. Dollar Index, a measure of the value of the U.S. dollar relative to majority of its most significant tradingpartners. This index is similar to other trade-weighted indexes, which also use the exchange rates from the same major currencies.

Europe, Australasia, Far East

An exchange-traded fund (or ETFⁱ) is an investment vehicle traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, bonds, or commodities and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.

The Footsie consists of 100 blue chip stocks that trade on the London Stock Exchange.

A market capitalization-weighted index of 40 of the largest companies that trade on the Hong Kong Exchange. The Hang Seng Index is maintained by a subsidiary of Hang Seng Bank, and has been published since 1969. The index aims to capture the leadership of the Hong Kong exchange, and covers approximately 65% of its total market capitalization.

A lot of foreign markets correlate with domestic ones, this custom index succeeds in producing an instrument that minimizes that correlation. The methodology that allows this employs a "bracing" ETFⁱ, in this case the iShares MSCI EAFEⁱ Index Fund (EFA). EFA holds companies like HSBC Holdings PLC (United Kingdom), BP PLC (United Kingdom), Nestle (Switzerland), Banco Santander SA (Spain), Total SA (France), Vodafone Group PLC (United Kingdom), Telefonica S.A. (Spain), Roche Holding AG (Switzerland), BHP Billiton Limited (Australia), Toyota Motor Corporation (Japan), Novartis (Switzerland), and GlaxoSmithKline PLC (United Kingdom). The rest of the ETFs are chosen to compliment and diversify the index.

Borrowing in order to supplement investment. This is usually done on margin, so if an investor has 10 dollars, they can use that money as collateral to borrow 10 more, giving them 20 dollars to invest with and 2X or 2:1 leverage.

This is a custom bullish market index, that is it expects the markets to move upwards. It is long S&P500, Russell 2000, industrial companies (General Electric Companies, United Technologies, UPS, 3M, Boeing, Caterpillar, etc.), consumer discretionary companies (McDonald's, Disney, Comcast, Home Depot, Target, Time Warner, etc.), consumer staples (Procter & Gamble, Wal-Mart, Philip Morris, Coca-Cola, CVS, etc.), and transportation (Burlington Northern Santa Fe, FedEx Corporation, Union Pacific Corporation, Con-way, Ryder System, Overseas Shipholding Group, etc.). And has leveraged longs in NASDAQⁱ and financials (J.P. Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, Citigroup, US Bancorp, American Express, Bank of New York Mellon, Morgan Stanley, Visa, etc.)

Think of the Monopoly Man, our intrepid banker. This index looks at all areas of financial activity, from regional banks to international financial powerhouses. Here you'll find American Express alongside Freddie Mae, Barclay's alongside Capital One and of course the giants of modern finance and capital markets - JP Morgan Chase and Goldman Sachs.

Nasdaq Composite Index A market-capitalization weighted index of the more than 3,000 common equities listed on theNasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks. The index includes all Nasdaq listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds (ETFs) or debentures.

Short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the U.S. In fact, it was called the Nikkei Dow Jones Stock Average from 1975 to 1985.

The instrument takes a general approach grouping together the activity of extracting resources and creating energy. It holds commodities as well as companies. This is where you will find water, gold and oil as well as traditional energy companies (Exxon, Chevron, ConocoPhillips) companies that mine and make metals (Arch Coal, Reliance Steel and Aluminum, Alcoa), and global solar companies.

An abbreviation of the Bombay Exchange Sensitive Index (Sensex) - the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India.

The SSE Composite Index is an index of all stocks that are traded at the Shanghai Stock Exchange in China.

The S&P 500 is one of the most commonly used benchmarks for the overall U.S. stock market. The Dow Jones Industrial Average (DJIA) was at one time the most renowned index for U.S. stocks, but because the DJIA contains only 30 companies, most people agree that the S&P 500 is a better representation of the U.S. market. In fact, many consider it to be the definition of the market. Companies included in the index are selected by the S&P Index Committee, a team of analysts and economists at Standard & Poor's. The S&P 500 is a market value weighted index - each stock's weight is proportionate to its market value.

"And I'll huff and I'll puff..." Real estate has taken quite the tumble, these three ETFs help the investor track the market as it is seen in equities. SPDR S&P Homebuilders (XHB) has companies like Tempur-Pedic, Williams-Sonoma, and Bed Bath & Beyond. iShares Dow Jones US Real Estate (IYR) looks at real estate companies like Boston Properties and Annaly Capital Management and Ultra Real Estate ProShares (URE) is a leveraged instrument that has similar holdings.

The idea behind this index is to have an instrument that tracks the companies involved in giving the structure and framework to our world. The traditional components of this instrument are Utilities (like PG & E and Edison) and Telecoms (AT&T, Verizon). We also have general technology in the Ultra Technology ProShares (ROM) ETFⁱ with Microsoft, Apple, and Cisco along with semiconductor and Internet companies like Intel and Google.

The Canadian equivalent to the S&P 500 market index in the United States. The S&P/TSXⁱ Composite Index contains stocks of the largest companies on the Toronto Stock Exchange (TSX). The index is calculated by Standard and Poor's, and contains both common stock and income trust units. Additions to the index are generally based on quarterly reviews. The Toronto Stock Exchange is dominated by a lot of commodity stocks, most notably crude oil, due to the concentration of natural resources in Canada. Thus, the S&P/TSX Composite Index is more correlated to the fluctuation in commodity prices than its counterparts in the U.S.

This is the place for tracking United States government and municipal debt as well as the dollar.

Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIXⁱ is a widely used measure of market risk and is often referred to as the "investor fear gauge".

The NYSE Arca Securities Broker/Dealer Index (XBDⁱ) is an equal-dollar weighted index designed to measure the performance of highly capitalized companies in the U.S. securities broker/dealer industry. Included in this group are companies in the U.S. that provide securities brokerage services, market making, U.S. Treasury Primary Dealer functions and other functions dealing with U.S. and international securities.