Definitions Starting with "G"

G7 Bond

G7 bonds are generally regarded as less risky than bonds issued by other countries. Accordingly, they are often more liquid than sovereign debt from other countries and are sometimes preferred by conservative income investors who want some international exposure. Read more

Gadfly

A gadfly is a shareholder who publicly criticizes a company's executives at the annual shareholders meeting.   The term gets its name from the insect, which bites and annoys animals (usually livestock). Read more

Gain

A gain, also called a capital gain, is an increase in the value of an investment. It is the difference between the purchase price (the basis) and the sale price of an asset. Read more

Gambler's Fallacy

The gambler's fallacy is a situation in which a gambler believes that a string of past events will change the probability of future events occurring.   Coin flips are the most common example of the gambler's fallacy. Read more

Gambling Income

Gambling income is any money that is earned from games of chance. Income from gambling is taxable money earned from games such as lotteries and keno or from institutions such as casinos or racetracks. Read more

Gambling Loss

A gambling loss is any money lost in lottery tickets, slot machines, table games (craps, poker, blackjack, etc. ), bingo games, racing bets and keno. Read more

Game Changer

A game changer is a person or thing that radically changes an industry or a company.   For instance, when Apple introduced the iPod, the product was a game changer. Read more

Game Theory

Game theory is a tool used to analyze strategic behavior by taking into account how participants expect others to behave. Game theory is used to find the optimal outcome from a set of choices by analyzing the costs and benefits to each independent party as they compete with each other. Read more

Gap Insurance

Gap insurance is insurance that covers underwater cars or RVs.   By "underwater," we don't mean "submerged in water. Read more

Garage Liability Insurance

Garage liability insurance is insurance that auto dealers and repair shops use to protect themselves from damage and bodily injury incurred in their service centers. Let's say John Doe takes his car to Jane Smith's Auto Body to get the tires changed and the brakes fixed. Read more

Garnishment

Also called wage execution, a garnishment is a process under which money owed or paid to a borrower is given to a creditor instead. Let's say John Doe has stopped paying child support to his ex-wife. Read more

Gas Guzzler Tax

The purpose of the gas guzzler tax is to discourage the manufacture of inefficient cars. The sticker on a new car should disclose the amount of gas guzzler tax that a manufacturer has paid on a car. Read more

GDP Gap

GDP gap refers to the disparity between an economy's actual total output and its possible total output. A country's GDP gap is mathematically expressed in the following way and serves as an indicator of where an economy stands in the business cycle: Gap GDP = GDP Actual – GDP Potential Measured as an indication of the number of jobs in an economy (labor productivity) a positive gap value indicates an expansion. Read more

GDP Per Capita

GDP per capita is a country's gross domestic product (GDP) per person. Essentially, this measures the amount of goods and sales a country produced per person, on average. Read more

General and Administrative Expense (G&A)

General and administrative expenses (also called selling, general and administrative expenses, or SG&A) are the indirect costs of running a business. It is important to note that under the accrual method of accounting, G&A is recorded for the period in which it is incurred and not necessarily the period in which it is paid. Read more

General Ledger

A general ledger (GL) is a consolidated record of a company's accounting entries. The general ledger is the central place, usually electronic, that stores every accounting entry a company makes. Read more

General Obligation Bond

A general obligation bond is a municipal debt issue that is secured by a broad government pledge to use its tax revenues to repay the bond holders. General obligation debt issued by local governments generally requires a pledge of full faith and credit of the local government. Read more

General Partner

A general partner is a member of a partnership that can incur debt or obligations on behalf of the partnership and is personally liable for those debts or obligations. In some partnerships, all the partners are general partners, and they are all liable for the debts and obligations of the business. Read more

Generally Accepted Accounting Principles (GAAP)

Generally Accepted Accounting Principles (GAAP) is a framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded U. S. Read more

Generation Gap

A generation gap is a difference in philosophies between generations. The most famous generation gap is the baby boomers, many of whom came of age in the 1960s, and their parents, who grew up around the Great Depression and tended to have traditional values. Read more

Generic Brand

A generic brand is a nondescript brand of product that does not have a widely recognizable logo and is sometimes called the "house brand. " For example, let's say John Doe wants to buy some cola. Read more

Gift Tax

A gift tax is a federal tax on anything of value that one person gives to another. Let's say Jane Smith gives her son John $25,000 because John is going through a tough time and just lost his job. Read more

Gifted Stock

Gifted stock is stock that one person gives to another person or entity. Let's say John Doe bought 200 shares of Company XYZ a long time ago when it was trading at $1 a share. Read more

Gifting Phase

A gifting phase is when a person begins planning for or actively begins giving away wealth as part of his or her estate planning. Let's say Jane Smith is 87 and has accumulated about $3 million over a lifetime of saving and investing. Read more

Gilts

Gilts are bonds issued by the British government. India's government bonds are also called gilts. Read more

Ginnie Mae (GNMA)

Ginnie Mae is the nickname for the Government National Mortgage Association. Ginnie Mae guarantees the timely payment of interest and principal on certain mortgage-backed securities (MBS). Read more

Glass Steagall Act

The Glass Steagall Act was passed by Congress in 1933. It prohibited commercial banks from conducting brokerage or investment banking activities. Read more

Global Investment Performance Standards (GIPS)

Global Investment Performance Standards (GIPS) are ethical standards for asset-management companies. They were established by the Association for Investment Management Research. Read more

Global Recession

A global recession occurs when global gross domestic product growth is 3% or less. The International Monetary Fund (IMF) identifies global recessions, which have some things in common with national recessions. Read more

Globalization

Countries have built economic partnerships that include trade, investment, capital flow, labor migration, and technology. Globalization is a term used to describe the integration of national economies through these partnerships. Read more

Gnomes of Zurich

Gnomes of Zurich is a slang, and often derogatory, term referring to Swiss bankers. A gnome is a mythical greedy creature that lives underground and guards money. Read more

Go Shop Period

A go shop period is a window of time during which public companies can solicit competing purchase offers. Let's say Company XYZ is for sale. Read more

Godfather Offer

A godfather offer is a tender offer that is so generous that turning it down would be a breach of fiduciary duty. Let's say Company XYZ wants to buy Company ABC. Read more

Going Concern

Going concern refers to the assumption that a company has the resources to continue operating in the foreseeable future. A bankrupt company or a company near bankruptcy is the opposite of a going concern. Read more

Going Private

The term going private refers to a company's departure from listing shares on any exchange. It is the opposite of going public. Read more

Going Public

Going public refers to a company's first issuance of stock on the open market. In most cases, the offering, called an initial public offering (IPO), makes the company's stock accessible to a large group of public investors for the first time. Read more

Gold Bug

Gold bugs are people who are fans of investing in gold. Gold is generally considered a safe haven against the ravages of inflation and volatile markets. Read more

Gold BUGS Index (HUI)

The AMEX Gold BUGS Index (also known as HUI) is one of two major gold indices that dominate the market. BUGS is an acronym for "Basket of Unhedged Gold Stocks. Read more

Gold Bull

A gold bull is someone who believes the price of gold will go up.   Gold bulls generally consider gold a "safe" hedge against inflation and even against volatile markets. Read more

Gold Certificate

A gold certificate is a piece of paper that entitles the bearer to a certain amount of actual gold. From 1863 to 1933, the U. Read more

Gold Fix

A gold fix occurs when the The London Gold Market Fixing Ltd. sets the price of gold. Read more

Gold Fund

A gold fund is an exchange-traded fund (ETF) or mutual fund that invests in gold. For example, let's assume that John wants to invest in gold. Read more

Gold Option

A gold option gives the holder the right, but not the obligation, to purchase or sell a specific quantity of gold at a specified strike price on the option's expiration date. Options are derivative instruments, meaning that their prices are derived from the price of another security. Read more

Gold Reserve Act of 1934

The Gold Reserve Act of 1934 nationalized gold and fixed the price of gold in terms of U. S. Read more

Gold Standard

The gold standard is a monetary system in which the representative currency is based on a fixed amount of gold held by the central government. Paper currency is actually a "legal note," i. Read more

Gold-Silver Ratio

The gold-silver ratio is measure of how many ounces of silver it takes to buy an ounce of gold. The formula for the gold-silver ratio is: Gold-Silver Ratio = Price of Gold per Ounce / Price of Silver per Ounce For example, let's assume that the price of gold is $1,500 an ounce today. Read more

Goldbrick Shares

Goldbrick shares are shares of stock that appear valuable but are actually worthless or worth very little. For example, let's assume that Company XYZ is a tech company with growing revenues but growing losses. Read more

Goldbricker

Goldbricker refers to coating something with gold so as to pass it off for something valuable, though colloquially, the term refers to an unproductive person. For example, assume John comes to work late every day, chats with his coworkers about the March Madness brackets, takes a two-hour lunch, sits in the bathroom for 30 minutes, takes a 45-minute break, surfs the internet on personal business, and then leaves early. Read more

Golden Boot

A golden boot is a financial package meant to encourage an employee to retire early. For example, assume that John is 60 years old and has been working at Company XYZ for 30 years. Read more

Golden Bungee

A golden bungee is part of an executive's agreement that provides significant financial benefits to the executive upon termination as well as the opportunity to "spring back up" into a new position after termination. For example, upon a change in ownership or a shake-up in management, a golden bungee clause in an executive's employment contract might specify that the executive will be granted special severance pay, bonuses, stock options, or other noncash benefits upon his departure from the organization. Read more

Golden Coffin

A golden coffin is slang for the portion of an executive contract that goes into effect should the executive die. For example, let's assume that John is the CEO of Company XYZ. Read more

Golden Cross

In the trading world, a golden cross occurs when a stock's short-term moving average rises above its long-term moving average. For example, let's assume that Company XYZ’s 15-day moving average has been about $14 per share. Read more

Golden Hammer

A golden hammer is a rule of thumb that people depend on too much. For example, when it comes to marketing, we often assume that the 18-34 demographic is the "holy grail" and that we should gear products and services to people in that age group if we want to have the best sales, biggest returns, or most buzz. Read more

Golden Handcuffs

Golden handcuffs are financial incentives designed to keep talented employees from leaving a company. Golden handcuffs may come in the form of lucrative commissions, generous bonuses, employee stock options, or other financial compensation; all provided to a talented employee as an incentive to keep them from moving out of the company. Read more

Golden Handshake

A golden handshake is essentially a severance agreement between an employee and employer. A golden handshake is similar to a golden boot, which is an incentive package sometimes offered to older workers. Read more

Golden Hello

A golden hello is slang for a signing bonus. For example, let's assume that John works for Company XYZ. Read more

Golden Life Jacket

A golden life jacket is a compensation package offered by an acquirer to executives of the company it is acquiring. It is the same as a stay bonus. Read more

Golden Parachute

A golden parachute is an agreement between a company and an employee (usually a high level executive) that provides significant financial benefits to the employee upon termination. For example, upon a change in ownership or a shake-up in management, a golden parachute clause in an executive's employment contract might specify that the executive will be granted special severance pay, bonuses, stock options, or other non-cash benefits upon his departure from the organization. Read more

Golden Rule

The golden rule is very simple: treat people the way you want to be treated. In the business world, it also refers to fundamental principles of government spending: cover current spending with existing taxes and borrow only to fund investments that benefit more than one generation of citizens. Read more

Golden Share

A golden share gives the holder the right to veto changes to a company's charter. Golden shares exist primarily in U. Read more

Goldilocks Economy

A Goldilocks Economy is one which enjoys sustained economic growth and low inflation.   This balance is attractive to investors because it allows for a market-friendly monetary policy from the Federal Reserve Bank. Read more

Goldman 360

Goldman 360 is an online portal to Goldman Sachs's investment management system. Goldman 360 allows investment managers, institutions, and advisors to conduct and obtain research, place orders, and analyze returns. Read more

Goldman Sachs Commodity Index (GSCI)

The Goldman Sachs Commodity Index (GSCI) is a commodities index now owned by Standard & Poor's. S&P acquired the index from Goldman Sachs on February 2, 2007 and renamed it the S&P GSCI. Read more

Good Delivery

Good delivery occurs when all the requirements for transferring title to a security from the seller to the buyer have been met. For example, let's assume John owns 100 shares of Company XYZ. Read more

Good Faith Estimate

A good faith estimate is a written estimate of the fees due at closing for a mortgage. The Real Estate Settlement Procedures Act (RESPA) requires a lender has to provide a written good faith estimate to a borrower within three days of the borrower applying for a mortgage. Read more

Good Faith Money

Good faith money is money a buyer uses to prove to a seller that he or she intends to complete a transaction. In real estate, good faith money is also called earnest money. Read more

Good This Month

Good this month refers to a type of trading order is automatically canceled if it is not filled by the end of the month in which the client makes the order. For example, let's assume an investor wants to sell 100 shares of Company XYZ at $25 per share or better. Read more

Good This Week

Good this week is a type of trade order that is automatically canceled if it is not filled by the end of the week in which the client makes the order. For example, let's assume an investor wants to sell 100 shares of Company XYZ at $25 per share or better. Read more

Good Through

A good through order is a trade order with a deadline. Usually, it is a stop loss or limit order. Read more

Good Til Cancelled (GTC)

Good til Cancelled, or GTC, is used to refer to an order to buy or sell a stock at a set price that remains in effect until the investor cancels the order or the trade is completed. When an investor places an order for a trade, he can specify that the order should remain in effect until a specific condition is met. Read more

Goodness of Fit

Goodness of fit (also known as a chi-square goodness of fit) is a statistical term referring to how far apart the expected values of a financial model are from the actual values. Goodness of fit is a component of regression analysis, which is a statistical method used in finance and a variety of other fields to make predictions based on observed values. Read more

Goods and Services Tax (GST)

A goods and services tax (GST) is simply a tax on goods and services for domestic consumption. This tax system is in place in about 160 countries, including Canada, India, Vietnam, Australia, United Kingdom, Spain, Italy, Brazil, and South Korea. Read more

Goods in Process

Also known as work in process (WIP), goods in process are the component of a company's inventory that is partially completed.   Goods in process = (operating inventory goods in process + raw materials used during the period + direct labor during the period + factory overhead for period) - ending inventory The value of that partially completed inventory is recorded as goods in process on the asset side of the balance sheet. Read more

Goodwill

Goodwill is the excess of purchase price over the fair market value of a company's identifiable assets and liabilities. Goodwill is an accounting construct that is required under Generally Accepted Accounting Principles (GAAP). Read more

Goodwill Impairment

Generally, a goodwill impairment occurs when a company A) pays more than book value for a set of assets (the difference is the goodwill), and B) must later adjust the book value of that goodwill. Goodwill is an asset, but it does not amortize or depreciate like other assets. Read more

Goodwill-to-Assets Ratio

The goodwill-to-assets ratio describes the percentage of a firm's total assets that can be explained by the amount of goodwill on the balance sheet.   The formula for the goodwill-to-assets ratio is: Goodwill to Assets = Goodwill / Total Assets For example, let's assume Company XYZ has $5,000,000 of goodwill on its balance sheet. Read more

Gordon Gekko

Gordon Gekko is a character from the 1987 Oliver Stone movie Wall Street and the 2010 sequel, Wall Street: Money Never Sleeps. Michael Douglas played Gordon Gekko in both movies. Read more

Gordon Growth Model

The Gordon Growth Model (GGM) is a version of the dividend discount model (DDM). It is used to calculate the intrinsic value of a stock based on the net present value (NPV) of its future dividends. Read more

Gorilla

A gorilla is a company that controls most of the market for a product or service. For example, in the 1990s, Microsoft was a gorilla in the market for operating systems. Read more

Government Accountability Office (GAO)

The Government Accountability Office (GAO) investigates, with congressional approval, the federal government's spending. The GAO started in 1921, when the Budget and Accounting Act transferred the government's auditing and accounting functions away from the Treasury Department. Read more

Government Accounting Office (GAO)

Founded in 1921, the Government Accounting Office (GAO) is an independent, nonpartisan agency that studies how the federal government spends taxpayer money. The head of the GAO is the Comptroller General of the United States. Read more

Government Bond

A government bond is debt issued by the government. The Treasury Department usually issues government bonds, typically through an auction process. Read more

Government Sponsored Enterprise (GSE)

In the US, government sponsored enterprises, or GSEs, are quasi-governmental, privately-held entities established to improve, and at times make possible, the flow of credit to specific sectors of the economy or to otherwise provide essential services to the public.   GSEs are established by Congress. Read more

Grace Period

A grace period is a period of time, usually about 10 days, during which a past due amount can be paid with little or no penalty. Let's assume your credit card payment is due on December 15. Read more

Graduated Vesting

Graduated vesting occurs when a financial instrument or account becomes wholly owned by an investor over time. Let's assume John Doe is eligible to participate in his company's 401(k) plan. Read more

Grandfather Clause

A grandfather clause is a clause that is included as part of a new law that exempts specific parties from the law due to practices that were in place prior to the law's implementation. For example, consider a law that is passed stating that all buildings with three or more stories must be equipped with two elevators. Read more

Grant

In the business world, a grant usually refers to a stock option grant. However, the term can also refer to federal funding for research, business ventures or partnerships. Read more

Grantee

In the legal world, a grantee is a person who receives something. In real estate, a grantee is a person who receives property after a sale or other transfer of title. Read more

Grantor

In the legal world, a grantor is a person or entity creating a trust. A trustee is a person or entity that has a fiduciary duty to another person or entity, called the beneficiary. Read more

Gray Market

In the investing world, a gray market exists when people begin trading shares that have not been issued yet. In the business world, a gray market is the novel but not always illegal process of obtaining goods or services. Read more

Great Depression

The Great Depression is a severe global economic contraction that began in the United States and spread throughout the rest of the world in the 1930s. The United States stock market crash of 1929 is the most famous market crash of all time. Read more

Green Shoe Option

A green shoe option is a clause contained in the underwriting agreement of an initial public offering (IPO). Also known as an over-allotment provision, it allows the underwriting syndicate to buy up to an additional 15% of the shares at the offering price if public demand for the shares exceeds expectations and the stock trades above its offering price. Read more

Greenback

Greenback is a slang term for the U. S. Read more

Greenmail

Greenmail is an acquisition tactic whereby the acquirer attempts to obtain a controlling interest in a target by buying shares at a premium from the target's shareholders. Let's assume an entity that Company XYZ considers unsavory (we'll call it Party X) is attempting to acquire control of Company XYZ by offering to buy shares at a premium from Company XYZ's shareholders. Read more

Greenwashing

Greenwashing is the act of misleading customers and potential customers into believing that a product or service is environmentally friendly. Let's say Company XYZ produces a new line of plastic food containers. Read more

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is a quantitative measure of how much an economy produces. It includes the monetary value of both goods and services within a specific nation’s borders. Read more

Gross Earnings

Gross earnings, also known as gross income, represents income before taxes or adjustments. In the accounting world, gross earnings are usually the same thing as gross profit (that is, revenue minus cost of goods sold). Read more

Gross Interest

Gross interest is the amount of interest an account or investment earns before deducting taxes, fees or other charges. It is expressed as a percentage. Read more

Gross Margin

Gross margin is a required income statement entry that reflects total revenue minus cost of goods sold (COGS).   Gross margin is a company's profit before operating expenses, interest payments and taxes. Read more

Gross National Product (GNP)

Gross national product (GNP) is the sum of all domestic and foreign output generated by citizens of a given country. It can be measured by spending or by income. Read more

Gross Profit

Also referred to as gross income or sales profit, gross profit is the total sales of a company minus the total cost of goods (COGS) sold. Gross profit reports are an important indicator of a company’s profitability. Read more

Gross Profit Margin

Gross profit margin is a measure of a company’s profitability, calculated as the gross profit as a percentage of revenue. Gross profit is the amount remaining after deducting the cost of goods sold (COGS) or direct costs of earning revenue from revenue. Read more

Gross Sales

Gross sales, also called "gross receipts", refers to a company's revenue before subtracting discounts and returns. Assume restaurant chain XYZ made $1 million in sales for the year. Read more

Group Banking

Group banking is offered by some banks to incentivize a whole group of people, like employees of a company, to have a relationship with the banking institution. A bank may team up with a large employer and offer its employees special benefits if they open an account with direct deposit. Read more

Groupthink

Groupthink is a psychological phenomenon whereby pressure within a group to agree results in failures to think critically about an issue, situation or decision. Let's say John, Jane, and Jeff are fund managers for the XYZ mutual fund company. Read more

Growth At a Reasonable Price (GARP)

Growth at a reasonable price (GARP) is an investment strategy that combines tenets of both growth and value investing by finding companies that show consistent earnings growth but don't sell at overly high valuations.   The term was popularized by legendary investor Peter Lynch. Read more

Growth Company

A growth company is characterized by a rate of growth higher than that of the overall economy. Growth companies generate consistently high levels of earnings, and place greater weight on reinvesting earnings in continued expansion. Read more

Growth Stock

Growth stocks are fast-growing, higher-risk companies. They tend to be young. Read more

Guarantee

In general, a guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. The entity assuming this responsibility is called the guarantor. Read more

Guaranteed Bond

A guaranteed bond is a bond whose interest and principal payments are guaranteed by a third party. An entity that issues a guaranteed bond has solicited a third party (usually a bank, insurance company or another corporation) that agrees to pay the interest and principal payments on the bond should they, the issuer, be unable to make such payments. Read more

Guaranteed Death Benefit

A guaranteed death benefit is a portion of an annuity that allows the investor's beneficiaries to receive a minimum amount of death benefits.   Let's say Jane Doe bought an annuity for $500,000 that has a guaranteed death benefit. Read more

Guaranteed Investment Contract (GIC)

A guaranteed investment contract (GIC) is an agreement between a contract purchaser and an insurance company whereby the insurance company provides a guaranteed rate of return in exchange for keeping a deposit for a fixed period of time.  Let's assume Company XYZ buys a GIC from the ABC Insurance Company on behalf of the employees enrolled in the Company XYZ pension plan. Read more

Guaranteed Issuance

Guaranteed issuance refers to an insurer’s requirement to sell a product to a customer regardless of health status, age, gender, or other factors that might affect the customer’s use of health care or prospect of death. Let’s assume that John Doe starts his own business selling garage doors. Read more

Guaranteed Loan

With a guaranteed loan, a party other than the borrower has promised to take responsibility if the borrower cannot make the payments. The entity assuming this responsibility is called the guarantor. Read more

Guarantor

In general, a financial guarantee is a promise to take responsibility for another company's financial obligation if that company cannot meet its obligation. The entity assuming this responsibility is the guarantor. Read more

Guidance

In the stock world, guidance refers to public communication from a company regarding earnings expectations. The world of earnings guidance is large and fluid, whereby the management of publicly traded companies issue public estimates about what they expect earnings to be for the coming quarter. Read more