Real Estate Investment Trust (REIT) – A security on the exchanges or the over the counter (OTC) market which purchases different kinds of real estate investments such as buildings, mortgages, and short term construction loans.
Real Interest Rate – The yield to maturity of a long term bond minus the inflation rate.
Real Rate of Return – The actual rate of return achieved by an investment reduced by the inflation rate.
Recession – A decline in the Gross Domestic Product (GDP) for a period of at least two (2) consecutive quarters.
Redeemable Security – A security that can only be bought back from and sold to the issuer and is not negotiable.
Redemption – The issuer buying back a security as with a mutual fund or when the issuer of a debt security or preferred stock repays the principal or face value to the holder at maturity.
Registered Investment Advisor (RIA) – A business who gives advice about investing in securities for a fee and must register with the Securities and Exchange Commission (SEC) and/or with the state.
Registered Representative (RR) – A registered individual who is employed by a broker/dealer to handle customer accounts and to advise the public about investing in securities.
Registrar – Typically a commercial bank, trust company, or organization that is responsible for maintaining the integrity of the list of the names and addresses of a company’s shareholders. The registrar ensures that the transfer agent does not over or under issue shares.
Registration Statement – The disclosure document that must be filed by all companies who offer non-exempt securities to the general public. It is filed with the Securities and Exchange Commission (SEC) as required by the Securities Act of 1933.
Regulation D – A private placement of securities without filing a registration statement with the Securities and Exchange Commission (SEC). The private placement can be sold to an unlimited number of accredited investors but only 35 unaccredited investors.
Regulation T – The Federal Reserve Board regulation which governs customer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities.
Regulatory Risk – The risk that new laws, especially tax laws, will result in the decline in the value of a security. Also known as legislative risk.
Reinvestment Risk – The risk that the dividends, interest, and principal will have to be reinvested at a lower potential interest rate.
Restricted Stock – Unregistered stock (private placement), usually issued directly to the officers or directors of a corporation. Re-sales of restricted stock must be traded in compliance with special Securities and Exchange Commission (SEC) regulations (Rule 144).
Return on Investment (ROI) – A measure of how effective a firm uses its capital to generate profit and is considered a measure of a company’s profitability. Also, the percentage return given by an investment computed by taking the annual cash flows generated by the investment, taking their average, and then dividing the average by the initial investment amount.
Revenue Bond – A municipal bond whose proceeds will be used to build a revenue-producing facility such as a sports area, a toll bridge, highway, hospital, or local stadium.
Revocable Trust – A trust that may be changed or canceled by its grantor or by another person. This type of trust does not avoid estate taxes as an irrevocable trust. Income is taxed at the grantor’s tax bracket as he/she retains control of the assets.
Risk Adjusted Rate Of Return/Risk Free Rate of Return/Risk Premium – The excess return that can be achieved by investing in a chosen asset class above that which can be achieved by investing in an asset class that has no risk such as treasury bills.
Roth IRA – A type of Individual Retirement Account that allows an individual to make non-deductible contributions for the purpose of saving for retirement. If the account is held for at least five (5) years, the distributions will not be taxable.
Rule 144 – A Securities and Exchange Commission (SEC) rule that limits the amount of restricted stock that can be sold, and places limitations on the timing of the sale of such stock.
Russell 2000 Index – Serves as a benchmark for the small cap stocks in the United States. A small cap index measuring the performance of the two (2) thousand companies in the Russell three (3) thousand index.