GlossaryGuide

Rule 506 of Regulation D provides two distinct exemptions from registration for companies when they offer and sell securities. Companies relying on the Rule 506 exemptions can raise an unlimited amount of money. Under Rule 506(b), a “safe harbor” under Section 4(a)(2) of the Securities Act, a company can be assured it is within the Section 4(a)(2) exemption… Continue reading RULE 506 OF REGULATION D

Rule 504 of Regulation D provides an exemption from the registration requirements of the federal securities laws for some companies when they offer and sell up to $5,000,000 of their securities in any 12-month period.  Except in limited circumstances, purchasers of securities offered pursuant to Rule 504 receive “restricted” securities, meaning that the securities cannot be sold for at… Continue reading RULE 504 OF REGULATION D

An employer-sponsored Roth 401(k) plan is similar to a traditional plan with one major exception. Contributions by employees are not tax deferred but are made with after-tax dollars. Income earned on the account from interest, dividends, or capital gains, is tax-free.

The term “robo-adviser” generally refers to an automated digital investment advisory program.  In most cases, the robo-adviser collects information regarding your financial goals, investment horizon, income and other assets, and risk tolerance by asking you to complete an online questionnaire.  Based on that information, it creates and manages an investment portfolio for you.  Robo-advisers often seek to offer… Continue reading ROBO-ADVISER

An investor’s ability and willingness to lose some or all of an investment in exchange for greater potential returns.

In finance, risk refers to the degree of uncertainty about the rate of return on an asset and the potential harm that could arise when financial returns are not what the investor expected. In general, as investment risks rise, investors seek higher returns to compensate them for taking on such risks.

When a company completes a reverse stock split, each outstanding share of the company is converted into a fraction of a share.  For example, if a company declares a one for ten reverse stock split, every ten shares that you own will be converted into a single share.  If you owned 10,000 shares of the… Continue reading REVERSE STOCK SPLITS

A municipal bond not backed by the government’s taxing power but by revenues from a specific project or source, such as highway tolls or lease fees.

The total amount of money, or gross income, generated by a company from selling its goods and services. A simple way to think about revenue is it’s the price of a widget multiplied by the number of widgets sold.

Restricted securities are securities acquired in an unregistered, private sale from the issuing company or from an affiliate of the issuer. They typically bear a “restrictive” legend clearly stating that you may not resell them in the public marketplace unless the sale is exempt from the SEC’s registration requirements. Rule 144 provides the most commonly used… Continue reading RESTRICTED SECURITIES