Dealer
A firm that can handle transactions for customers as well as its own account.

Debt Security
One of two types of securities, the other being equity securities. Debt securities are the legal obligation owed by an issuer to an investor when an issuer borrows money from the investor. The debt security outlines the terms of this obligation including: the amount the issuer borrowed, the interest rate and frequency of interest payments to be made to the investor, and the time at which the security will mature or may be called. If a company goes bankrupt, debt security holders may make claims against the company's assets before equity security holders.

Default Risk
Risk that an issuer will default on its fixed income obligations.

Defined Benefit Plan
Guarantees a specified dollar amount when you retire.

Defined Contribution Plan
Contributions are made to a retirement account by you or your employer or sometimes both. The benefit amount depends on how much is contributed, plan management and economic conditions.

Deflation
A decline in the general price level of goods and services that results in increased purchasing power of money. The opposite of inflation.

Delta
A measure of the relationship between an option price and its underlying futures contract or stock price.

Depreciation
A decline in value. In accounting, a reduction of earnings to write off the cost of an asset over its estimated useful life.

Depression
A severe downturn in an economy that is marked by falling prices, reduced purchasing power, and high unemployment.

Derivative
A complex investment whose value is derived from or linked to some underlying financial asset, such as stocks, bonds, currencies or mortgages. Derivatives may be listed on exchanges or traded privately over-the-counter. For example, derivatives may be futures, options, or mortgage-backed securities.

Devaluation
The government's reduction of the value of its currency in relation to the currency of other counties. When a nation devalues its currency, the goods it imports become more expensive, while its exports become less expensive abroad and thus more competitive.

Disclaimer Trust
A trust designed for couples who do not yet have enough assets to need a credit-shelter trust. A disclaimer trust allows the surviving spouse to disclaim up to $600,000 of the estate and have those assets put into a credit-shelter trust.

Discount
In general, the amount by which one security price is less than another. In financing, it is the interest withheld when a note, draft, or bill is purchased.

Discount Brokers
Brokers who charge lower commissions than full-service brokers. Investors often give up the benefits of stock-picking advice, updates on news affecting their investments and research services normally provided by full-service brokers.

Discount Rate
The interest rate charged by the Federal Reserve on loans to banks and other financial institutions. This rate influences the rates these financial institutions then charge to their customers.

Disinflation
A slowdown in the rate of price increases. Disinflation occurs during a recession, when sales drop and retailers are unable to pass higher prices along to consumers.

Diversification
The effort to limit the exposure to various risks in one's investment portfolio. A method for trying to limit risk is offered by an investment model such as the Asset Allocation Model.

Dividend Yield
A company's annual dividend expressed as a percentage of its current stock price.

Dividends
A portion of a company's income paid to shareholders as a return on their investment.

Dollar-Cost Averaging (DCA)
A strategy to invest fixed amounts of money in securities at regular intervals, regardless of the markets' movements.

Dow Jones Averages
There are four Dow Jones averages that track price changes in various sectors. The Dow Jones Industrial Average tracks the price changes of the stock of 30 industrial companies. The Dow Jones Transportation Average monitors the price changes of the stocks of 20 airlines, railroads and trucking companies. The Dow Jones Utility Average measures the performance of the stock of 15 gas, electric and power companies. The Dow Jones 65 Composite Average monitors the stock of all 65 companies that make up the other three averages.

Dow Jones Equity Market Index
Index that measures price changes in more than 100 U.S. industry groups. The stocks in the index represent about 80% of U.S. market capitalization and trade on the New York Stock Exchange, the American Stock Exchange and the NASDAQ Stock Market. The equity-market index is market-capitalization weighted, which means that a stock's influence on the index is proportionate to its size in the market.

Dow Jones Global Indexes
Some 2,700 companies' stocks in 29 countries world-wide are tracked by geographic region and by 120 industry groups. Collectively, they represent more than 80% of the equity capital on stock markets around the world. All of the indexes are weighted by market capitalization, which is the product of price times shares outstanding. Thus, each country carries a weight proportionate to the relative value of its equities to all those in the world. The U.S. market is the world's biggest, and the U.S. component of the global indexes has the most stocks, more than 700.

Dow Jones Industrial Average (DJIA)
Often referred to as the Dow, it is the best known and most widely reported indicator of the stock market's performance. The Dow tracks the price changes of 30 significant industrial stocks traded on the New York Stock Exchange. Their combined market value is equal to roughly 20% of the market value of all stocks listed on the New York Stock Exchange.

Duration
A measure of the weighted average of a bond's cash flows. It is used to quantify a fixed income investment's price sensitivity to interest rate movements.