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Part: 5 Here's Our Advice > Glossary - Pg. 294

Glossary 294 S&P 500 See Standard & Poor's 500. salary reduction plan A retirement plan that permits an employee to set aside a portion of earned income in a tax- deferred account selected by the employer. Contributions made to the account and income earned from investing contributions are sheltered from taxes until the funds are withdrawn. Also called 401(k) plan . sales load/sales charge The amount paid in order to purchase mutual fund shares. Also known as a "load." The charge is a percentage of the total amount invested. If $1,000 is invested in a fund with a 3 percent sales charge, for instance, the load is $30 and the net amount invested is $970. Savings Incentive Match Plan for Employees (SIMPLE) A salary-deferral pension plan with an employer match, offered only for companies with fewer than 100 employees. It can be set up in an IRA or 401(k) format. sector fund An investment company that buys securities or other assets sharing a common feature. For example, a sector fund may limit its holdings to a particular industry sector, a particular country or geographic region, or some other narrow or specialized investment category such as precious metals. Sector funds allow investors to purchase positions in specific investment segments and yet diversify their investments among various issuers. securities Investments, including stocks and bonds. Securities and Exchange Commission (SEC) The federal agency that administers U.S. securities laws. The SEC, headed by five appointed