Glossary

This Chicago-based company tracks changes in earnings estimates, as well as buy, sell, and hold recommendations for approximately 5,000 stocks.

The information is provided by more than 3,500 financial analysts at more than 210 brokerage firms.

Based on its research, Zacks compiles consensus earnings estimates, industry group reports, and company reports that are widely followed by both individual and institutional investors.

The service is available to all investors by subscription.

Zero-coupon bonds, sometimes known as zeros, are issued at a deep discount to par value and make no interest payments during their term.

At maturity, the bondholder receives par value, which includes the interest that has accrued since issue. For example, you may purchase a zero-coupon bond with a six-year term for $13,500, and collect $20,000 at maturity.

One advantage of zeros is that you can invest relatively smaller amounts and choose maturity dates to coincide with times you know you'll need the money -- for example, when you expect college tuition bills to come due.

One drawback of zeros, however, is that income taxes are due annually on the interest that accrues, even though you don't receive the actual payment until the bond matures. The exception occurs if you buy tax-exempt municipal zeros, on which no tax is due either during the term or at maturity.

Another drawback is that zero coupon bonds are volatile in the secondary market, so if you have to sell before maturity, you might have a loss.

These bonds get their name -- zero coupon -- from the fact that coupon means interest in bond terminology, and there's no periodic interest.

A zero-coupon convertible bond, like other convertible bonds, can be converted into stock in the issuing corporation if the stock reaches the trigger price.

Municipalities may issue tax-exempt zero-coupon convertible bonds you can exchange before maturity for conventional taxable bonds.

The advantage of both taxable and tax-exempt zero-coupon convertibles is that they give you access to a potentially substantial gain for a small initial investment since you purchase the zero-coupon for less than the face value. But like all zero-coupons, these convertibles tend to be more volatile in the secondary market than nonconvertible bonds.

A zero-sum market is one in which one investor's profit mirrors another investor's loss. For every dollar one person makes, someone else loses a dollar. Commodities and options markets are examples of zero-sum markets. Stock markets are not.