Annual Report

Broadly, an annual report refers to the annual financial report of a company, which describes its results of operations and financial condition. Annual Reports for public companies can be quite extensive (with many disclosures legally required) and include all types of charts, photos and artwork. A related term in the US is Form 10-K (or simply “10K”), which is a public company’s annual report to the Securities and Exchange Commission (“SEC”). 10-Ks typically provide more information than is found in a Company’s Annual Report.

Ask, also called Ask Price or Offer Price

The price a seller is willing to accept for a security. When a customer order comes to an exchange, the order is filled by the market maker with the lowest Ask Price. In published (online or other media) reports, the term generally refers to the lowest price a market maker is willing to accept.

Ask Size

The number of shares offered for sale at a given ask price by a market maker. When an order larger than the Ask Size comes to an exchange, the customer may have to pay a higher price for the additional shares. The Ask Size indicates the supply of the related stock and may be used by traders to determine any pressure on the price of a stock.

Asymmetric Risk

Symmetry refers to balance, proportionality and/or having a similar size or shape. Asymmetric describes something having no balance or symmetry.

At StockTips.com, we like to find stocks where we believe that the chances of gaining 10, 20 or 50%, etc. are much greater than the chances of losing. Or more often, it’s a case where we believe that the stock has a better than even chance to become a “winner”, and if so the share price could rise 50, 100% or more – while if the stock turns out to be a “loser”, losses are likely to be much less in percentage terms.

In these situations, we will uses terms such as asymmetric risk or asymmetrical risk to indicate that we believe that odds are the opportunity for profit is out of balance (in the investor’s favor) with the potential for loss.

Bonds

A debt security in which the authorized issuer borrows money from an investor. Issuers are mainly corporations and governments such as municipalities. Bonds typically have a fixed interest rate, an interest payment schedule and a defined repayment date (called maturity date), but terms can be more exotic.

Bid

An offer to buy a security. A Bid from an investor or dealer will include the price and the number of shares the bidder is offering. The term Bid, when shown in published (online or other) reports, Bid generally means the price at which a market maker is willing to buy a security (also see Bid Size).

Bid Size

The number of shares a buyer is willing to buy at a specified price. Bid Size, when used in published (online or other) reports, generally refers to the number of shares a market maker is willing to buy at a specified price.

Big Board

A nickname for the New York Stock Exchange.

Candlestick Chart

A bar-charting method (with some characteristics of a line chart) often used for technical analysis of equity price patterns. When used for this purpose, a Candlestick Chart will typically display movements of high, low, open and closing prices over a period of time.

Capital Investment

The term refers to money that a business spends on such things as buildings, factories and machinery, expecting that they will be productive and bring profits over in the future. In other words, Capital Investment is used for long-term business development rather than daily operating expenses.

Common stock

In the US, a security representing a form of corporate equity ownership. It is called “common” to distinguish it from preferred stock. Common Stock usually, but not always, comes with voting rights related to determining such things as corporate policy and the members of the board of directors. Dividends may also be paid to common shareholders.

In the event of bankruptcy, common stock investors are last in line to receive any funds from the bankruptcy process. On the other hand, common shares on average perform better than preferred shares or bonds over time. More than any other security offered by a company, the value of a Common Stock depends on company earnings and the liquidity of the market for the stock.

Common Stock can also be referred to as Ordinary Shares.

Credit

See Debits and Credits.

Currency Risk

The risk that fluctuating currency values may affect your investment.

Day trading

The practice of buying and selling financial instruments such as stocks, futures, options and currencies in hopes of gaining quick profits throughout the day. The normal practice of day traders is to close out their positions (i.e., by offsetting any previous trades) before the relevant market closes. However, in some cases day traders will maintain open positions (and thus have financial exposure) beyond a single day’s market close.

Dead Cat Bounce

A term used by investors to describe a small, brief rise in the price of a declining stock (or a market), after which the price (or market) continues to decline. Coming from the saying “Even a dead cat will bounce if dropped from a great height.”, the phrase may also be applied to anything that experiences a brief renaissance during or following a decline.

Debits and Credits

Fundamentally an accounting term, Debits and Credits refer to the two sides of recording every financial transaction in a double-entry bookkeeping system. For balance sheet items (assets, liabilities and equity) assets are recorded as Debits, while liabilities and equity are recorded as Credits.

More practically for most people, when you deposit money in a bank, the bank Credits your account as they have a liability to you. If you withdraw money, the bank will Debit your account as their liability to you is reduced. From this comes the term Debit Card. The term Credit Card originally came from the fact that when one charges something on a credit card, the bank must Credit the merchant’s account for its liability to the merchant. (Actually the process involves more people between the bank and the merchant, but that’s not important here.)

A Debit Card is used to purchase things with your own money. A Credit Card is used to purchase things by borrowing money.

Sometimes confusing is that the term Credit has a non-accounting meaning in English. In this case Credit refers to the ability to obtain goods, services or cash based on a promise to pay later. Thus a loan from a bank is also commonly called a Credit.

Dilution

In general to dilute means to make something less concentrated. Stock dilution is the result of new shares being issued, which reduces the ownership percentage of existing shares. This is not necessarily bad. For example, if a company worth $10 million has an IPO which dilutes the ownership percentage of its existing shareholders to 80%, but the additional funds allow the company to increase its value to $20 million – the older shareholders owning 80% of $20 million are much better off financially than when they owned 100% of $10 million.

Possible effects of stock dilution: reduced ownership and voting control of existing shares, a reduction of EPS (unless the addition shares allow an earnings increase that offsets the impact of new shares) and/or a change in share prices.

Related terms include dilutive, dilutive effect and anti-dilutive.

Dividends

Distributions made by a corporation to its shareholders. Generally, Dividends are cash payments, but a company may distribute additional shares of stock (a “stock dividend”) or other items such as property. For companies with multiple classes of stock, Dividends are often, if not almost always, distributed unequally among share classes (including distributing no Dividends to some share classes).

ETF

An ETF (Exchange Traded Fund) is a security that tracks an index, a commodity, or a basket of assets like an index fund, but is traded much like a stock on an exchange.

Fungibility

The property of a good or other asset whose individual units are capable of mutual substitution, such as crude oil, wheat, precious metals or currencies. For example, if someone lends another person a $10 bill, it does not matter if they are given back the same $10 bill or a different one, since currency is fungible. If someone lends another person their car, however, they would not expect to be given back a different car, even of the same make and model, as cars are not fungible.

Gap risk

The risk of an investment’s (such as stock) price changing from one level to another without any trade occurring in between, i.e., from one trade to another. Generally such price changes result from significant news or events.

GDP

Gross Domestic Product, or the value of all goods and services produced over a time period (normally reported on an annual basis) within a defined region’s (normally a country) borders.

Graham Number

This is a theoretical calculation of the fundamental fair value of a share. It is useful mainly to long-term, value investors and does not consider recent developments in a company, the markets or the general economy.

The formula is: Fair Value of a Share (or Graham Number) = Square Root of (22.5 x Book Value per Share x Earnings per share).

Theoretically, if this Graham Number is higher than the current price per share then the stock is probably a good deal to buy. If the Graham Number is lower than the current share price, the stock is probably overpriced. Like all calculations of fair value, and especially since this number does not apply to all kinds of stocks, the Graham Number should never be the only factor determining a trader’s investing choices.

Green Company, also Green Business

A green company claims to be committed to reducing the environmental impact of its customers and of its own (and its suppliers) operations, products and services. A “pure” green company is one that derives most or all of its revenues from such as cleantech, renewable energy, pollution control and the like. However, even a company with a substantial environmental footprint may be considered green if it is actively committed to such things as the conservation of natural resources, clean air and water projects, energy efficiency, biodiversity protection and the use of eco-friendly products.

Green Investment, also Eco Investment

An investment in a company, or companies, that are considered ‘green’ based on their commitment to environmental protection and promotion of ecological awareness through manufactured products or provided services.

Green Investor

A person whose portfolio reflects a commitment to investing in companies that claim to run their daily operations in an environmentally friendly and socially responsible fashion. Generally green investors focus on businesses that develop or provide renewable energy sources, increased energy efficiency, (smart grids, energy storage, etc.), reduced energy consumption, recycling services, and improved air and water quality, among other things.

Half Stock

Common or preferred stock with a par value of half what is considered standard.

Halloween Indicator, also called Halloween Strategy

This is an alternate term for the popular stock market adage “Sell in May and go away.” The trend is based on the historical stocks’ tendency to generate greater returns during the six-month period between November 1 and April 30. Despite the fact that it remains unclear why the stock market behaves in such way, investors choosing the Halloween indicator as their trading strategy (sometimes referred to as “Halloween Strategy”) typically sell stocks in the beginning of May and buy again around Halloween.

Hedge Fund

A private investment fund which is open only to a limited number of legally qualified investors such as institutions or high net worth individuals. Hedge Funds generally get involved in a much broader range of investment classes and trading activities activities than tradition investment funds. Hedge Funds are generally actively managed and aim towards high returns.

In the Red

This generally refers to having net losses or more informally losing money. It can also mean that a person or entity is in debt. The phrase comes from the old accounting practice of using red ink for negative numbers.

An antonym is In the Black.

Inflation Risk

The risk that your money’s spending power will be reduced by rising prices.

Invest

A process of devoting some kind of capital (i.e., money) towards expenditures or the purchase of assets with the goal of some type of profit. A financial investor might invest in stocks or bonds. A company might invest in a factory or new business idea. A charitable organization might invest in some thing or idea that offers the potential to improve social welfare.

Investment Risk

The sum total of the various risks associated with investing. Investment risk is not good or bad, its simply a part of the market. Generally the higher return you seek, the more risk you must take. This is sometimes referred to as a Risk-Return Trade-Off. There is also a Risk of Not Investing, where you fail to adequately build wealth because of a fear of Investment Risk.

Investments Risk is made up of any number of other risks, which can be classified in many different ways. These include: Market risk (or Systematic risk), Specific risk (or Unsystematic risk), Timing risk, Inflation risk, Liquidity risk, Legislative risk and Currency risk.

Portfolio diversification is a key to reducing your investment risk.

IPO

Standing for Initial Public Offering, an IPO is the first sale of stock to the public by a private company. In popular culture, IPOs are often associated with young, dynamic companies seeking money for growth. However, many large and well-established private companies also decide to “go public”. Their reason may also be to obtain capital for growth, but often include such goals as prestige, increasing public exposure and providing liquidity to existing shareholders.

Junior Equity

A security with rights to a company’s assets and income that are subordinate to other securities in the case of a bankruptcy or when dividends are declared. Typically this term refers to the common stock of a company.

Joint Credit

A shared credit given to two or more individuals or organizations. The parties accept joint responsibility for repaying the debt.

Key Performance Indicators

Quantifiable measurements which an organization company or industry uses to evaluate the success of its activities or compare its performance to its strategic and operational goals. Key Performance Indicators (“KPI”) vary by company and industries.

Legislative Risk

The risk that changes in government policy may impact your investment.

Liquidity

Refers to the ease of selling an asset or security quickly without significantly affecting its price. An investment security that can be sold quickly and easily without significantly affecting its price is referred to as liquid. Reverse terms are illiquidity and illiquid. These terms may also be used to describe a company’s ability, or inability, to meet its payment obligations.

Liquidity Risk

The risk you might not be able to sell your shares quickly enough to avoid selling below your target price.

Market Capitalization, also called Market Cap

This is the total market value of all of a company’s outstanding shares. It is calculated by multiplying the number of the outstanding shares of a company by the market price of single shares.

Market Risk (or Systematic Risk)

Risk related to the market or industry as a whole. Market Risk factors include interest rate changes and general market declines or advances.

Market Share

The percentage of a company’s (or other unit such as a country) revenues (or units sold) relative to the total for an industry or market. Many investors look carefully at a company’s increases or decreases in market share as an indication of the competitiveness of its products or services. Also, an increasing market share may allow a company to increase its profitability as a result of improved economies of scale.

Naked Position

An unhedged, or uncovered, financial position in a market which is not protected from the risk of price fluctuations. The simple ownership of shares in a company is a Naked Position and is not a concern to most small investors. However, if a company makes a large sale to be paid for at a later date in a foreign currency, it may decide lock in its profit by covering its Naked Position in the foreign currency with a currency option. A Naked Position offers more potential for gain and risk of loss than a covered position which is hedged from market risk.

NASDAQ

Originally this stood for the National Association of Securities Dealers Automated Quotations. Nasdaq was the world’s first electronic stock market. It facilitates trading and provides price quotations to buyers and sellers of many securities. Although often thought of as a market for smaller companies, many giant companies such as Apple Computer and Microsoft are listed on Nasdaq.

NYSE

An abbreviation for the New York Stock Exchange, the largest (by market capitalization of listed securities) and oldest stock exchange in the United States. It is owned and operated by NYSE Euronext, a global operator of financial markets. The NYSE is located on Wall Street and has the strictest listing requirements of all American equity exchanges. The NYSE still uses a central, physical exchange in contrast to markets like NASDAQ which are virtual communication networks. However, electronic trading is also critical to the NYSE.

Odd Lot

A quantity of a security that is less than the normal unit of trading for that particular security. For stocks this is normally any transaction of less than 100 shares. In these days of computerized trading, the financial penalty for trading in odd lots is usually less than in the past. However odd lots may incur additional brokerage costs, and possible delays in execution on the exchange, especially with low volume stocks, may result in less advantageous pricing. Also some exchanges deal almost exclusively in round lots, leading to possible delays or other problems when executing odd lots.

Outside of the world of finance, Odd Lot may be used for any irregular packaging of a product.

Over-the-Counter (OTC)

Many securities not listed and traded on a formal stock exchange such as the NYSE are often traded through networks of broker-dealers, or Over-the-Counter. OTC securities include debt instruments and derivatives as well as stock. The OTC Bulletin Board (http:/www.otcbb.com) provides online information, including trading data, on many OTC securities. The pinksheet market is also used to trade OTC securities.

Par Value

The nominal value of a stock share as established by the issuer, or the face value of a bond. Not all stocks have a Par Value. The market value of a stock or bond normally differs from its Par Value, and in the case of most common stock shares Par Value bears no relation to market value.

Penny Stock

Refers to a common stock with a low price and a small market cap. There is no single generally accepted definition of a Penny Stock. Generally, the term is used to describe stock that trades for under $5 per share (i.e., pennies) and most are traded OTC. These stocks can be illiquid and speculative. However, there are a number of large, stable companies whose shares trade on major stock exchanges at prices less than $5 and many small speculative companies whose share price is over $5.

Pigs Get Fat, Hogs get Slaughtered

This idiom, which appears in different forms and often given slightly different meanings, generally means that it’s OK to be a little greedy, but getting too greedy can lead to ruin. For investors who invest in the more speculative, volatile stocks we profile, this means that if they see a 20% – 40% price increase within a short time after investing, they should seriously consider selling and happily taking their profits at that level. An investor overly concerned that they might lose out on even more profit might see his/her entire gain wiped out in a few days.

Related phrase: Bulls Make Money, Bears Make Money, Pigs get Slaughtered.

Preferred Stock

A security representing a form of corporate equity ownership with a higher (i.e., “Preferred”) claim on the assets and earnings of a company than common shares. Preferred Stock is generally considered to be a hybrid of equity and debt.

The terms of a Preferred Stock share can vary considerably among different issues, but generally these shares have no voting rights, generally offer a dividend with priority over any dividends paid to common shareholders (but less priority than interest on debt instruments) and may be convertible into common shares.

Preferred Stock can also be referred to as Preferred Shares, Preferreds or Preference Shares.

Priced Into (as in Priced Into the Market)

This is where an anticipated future event (or events) is reflected in the current price of an asset (such as stock). Investors and analysts normally consider the future when deciding whether to buy, sell or hold an asset and at what price. Anticipated future events may include such things as general market conditions (growth or recession, interest rate changes, etc.) and company-specific events (such as anticipated earnings, new competition, etc.). This is why when a big event is announced by or about a company, the share price often barely moves. The event’s anticipated impact has already been Priced into the Market.

Profit

In a broad sense, Profit means to make a gain or receive a benefit. For our purposes at StockTips.com, there are three main uses. If an investor sells a security (or a group of securities) at a price in excess of the purchase price and all related trading costs, he/she has made a Profit. If the investor is discussing a company, the term Profit (or Profits) refers to the company’s income exceeding its expenses. Finally, when discussing any transaction or project by a company or individual, a financial gain can be called a Profit.

Portfolio Diversification

The act or strategy of investing across investment types, risk levels, industries and companies. This process may also include investing in a variety of countries and/or currencies, among other things. The goal is to reduce investment risk by hedging against investments already in a portfolio, or at least reduce dependence on any single investment.

Portfolio Plan

Every investor has different financial needs (liquidity, time horizons, etc.) and risk tolerances, among other considerations. One investor like risk and active involvement with their portfolio, while another might prefer to invest in a relatively secure long-term asset that they can basically forget about. One investor might be saving to make a down payment on a house in the next few months, while another is saving for a retirement that is decades away.

So a recommended investment strategy is to take these factors into account and design a Portfolio Plan with a general purpose that balances investors needs and personality, along with related investing guidelines.

Quote

The most recent trade price of a security, and also the bid and ask prices offered for the purchase or sale of a security.

Return

For our purposes, a profit from an investment. Return can also be used to describe the proceeds from the sale of an asset (gross, without considering the purchase price) or a report such as a tax return.

Risk

The possibility of an undesirable outcome. In the case of an investment, this generally means the potential for a financial loss.

Roll-back

To replace an existing options position with a new one with the same strike price but an earlier expiration date.

Round Lot

This is the normal trading unit for a security. For stocks, this is normally a group of 100 shares or a number of shares evenly divisible by 100, although this number can vary by exchange or type of stock. Any quantity less than 100 shares may be referred to as an odd lot. A group of 295 shares might be referred to as a mixed lot, consisting of both a round lot and an odd lot.

Sarbanes-Oxley Act, also referred to as SOX

An act passed by the U.S. Congress in 2002 to increase protections for investors against fraudulent accounting activities by publically-traded corporations. The Act mandated strict new and enhanced standards to improve financial disclosure and reduce accounting fraud. The Act affects boards of directors, managers, public accounting firms and analysts; and imposes civil and criminal penalties for violations. The most visible effects are senior management certifications of (i.e., taking individual responsibility for) the accuracy of their company’s financial statements, management and auditor (except for smaller companies) reports on the adequacy of internal controls and increased disclosures of off balance sheet items and other financial transactions.

SOX was enacted in response to the accounting scandals of the early 2000s,.such as Enron, Tyco, and WorldCom. These scandals shook investor confidence, which is crucial to efficient stock markets. A major goal of the Act is to restore, improve and maintain investor confidence.

Security

An instrument representing a financial interest. Securities can be broadly categorized into:
- equity securities such as common and preferred stocks,
- debt securities such as notes and bonds, and
- derivative contracts such as options, warrants, futures and swaps.

Shareholder (or Stockholder)

A person or institution (such as a corporation) that owns one or more shares in a corporation.

Seed Capital

The initial money, usually a small amount, used to start a new company or project. Seed capital may be used to fund such things as market research, initial operating expenses, research and development and initial product development.

Share

A unit of ownership interest in company or other asset. In the U.S., the two major types of shares for ownership in a company are Common and Preferred. (Also called Common Stock and Preferred Stock, respectively.)

Short Sale

The sale of securities, commodity futures or currencies not owned by the seller. The investor hopes to be able to buy the asset at a lower price in the future and close out the position with a profit. In this way the investor hopes to profit from declining prices for the asset that was sold. This is the opposite of an investor who buys an asset (Owning an asset is called a “long” position.), say stock, and hopes to profit from the stock’s price increasing.

Short selling is a sophisticated strategy with unique risks. For example a stock price cannot fall below zero, but it can rise astronomically. So a short seller can lose more than the amount invested. Also, short sellers face high margin requirements.

Related terms are Shorting, Going Short and Short Seller.

Social Mobility

This refers to the ability of people or groups to move upward or downward in social class or status within a population. This movement can be within a single lifetime or inter-generational. This movement can be measured by such things as education, wealth, income, occupation, other social variables or a combination. In the US, Social Mobility normally means the ability to improve one’s socio-economic level.

Specific Risk (or Unsystematic Risk)

Risk related to a company’s inability to perform in the market or against its competitors. Specific Risks can also affect entire industries.

Stock

A security that represents equity ownership in a company. The units of this ownership interest are generally called Shares. In practice the term Stock (or Stocks) is used as a synonym for Shares or Equity.

Stock Broker, also Stockbroker or Registered Rep

A licensed professional who buys and sells stocks and other securities on behalf of investors. These investors may be individuals, companies or other types of entities such as universities.

Stock Exchange

An entity that provides facilities and services (physical or virtual) for the trading of securities.

Stock Market

A market where securities are bought and sold. The term Stock Market can be considered a broader term than stock exchange (i.e., Stock Exchanges can be considered to be components of a broader Stock Market), but often in practice the terms Stock Market and stock exchange are used interchangeably. The New York Stock exchange can quite properly be referred to as a Stock Market.

Stock Split

An action by which a company divides a class of its stock shares (including related derivatives such as stock options) into a larger number shares. Theoretically, the total value of the shares will not change because of the split. So for example, in a 2-for-1 stock split a single share valued at $100 will become 2 shares valued at $50 each. A related term is Reverse Stock Split by which a company reduces the number of its shares.

Systematic Risk

See Market Risk definition

Technocracy

This is a form of government where technical experts are chosen to run the government and manage society. Leaders and other decision makers would be selected based on their specialized knowledge and governing skills. Recently in the US and Europe, resulting largely from the financial crisis, democratically elected leaders have tended to enact tough measures based on the insistence of technocrats, put technocrats in positions of power and/or turned important decisions over to a “super committee” While not technically a Technocracy, the basic process and end results are often the same.

Ticker symbol

An arrangement of characters identifying a particular publicly traded security. The symbol may be a series of letters, numbers, or a combination of both. In the United States a letter-only code is accepted as the standard for common stock symbols. Ticker symbols allow investors and brokers immediate identification of stocks on a stock market, i.e., M for Macy’s Inc., BAC for Bank of America and GOOG for Google.

Timing Risk

Risk related to buying or selling shares at a disadvantageous time.

Trading

For our purposes, Trading is the act of buying and selling securities on a stock market.

Unlisted Security

A security that is not traded on an exchange because the company has chosen not to trade publicly or is unable to meet listing requirements. Such securities may be traded privately or over-the-counter.

Undervalued

A term for an investment which sells for a price that is considered to be below its true value. However, it is important to note that an investment’s value is subjective and may change due to factors that have very little to do with the company itself. There is also no guarantee that the market value of a company commonly referred to as Undervalued will ever increase.

Unsystematic Risk

See Specific Risk definition

Volatile

For our purposes, this refers to a security that tends to be subject to large price fluctuations. Penny stocks tend to have more price volatility than blue chip stocks, but this is no always the case. A volatile stock offers the potential for larger and quicker gains – but also the potential for larger and quicker losses.

VIX®, or the The CBOE Volatility Index®

A popular measure of investor sentiment and expected near-term (30 days) market volatility calculated by the Chicago Board Options Exchange (“CBOE”). One of a number of volatility indexes calculated by the CBOE, the VIX is based on S&P 500 stock index option prices. It is often referred to as the fear index or fear gauge. The VIX is presented in percentages. A number of publically-traded derivative instruments are based on this index.

Warrant

A security giving its holder the right to purchase securities from the issuer at a specified price during a given time period. Warrants to purchase a company’s common stock are often packaged with issues of preferred stock of debt as a sweetener to entice investors and allow the issuer to pay lower interest or dividend rates. Warrants may be detachable (Detachable Warrants) and sold independently of the bond or stock.

Warrants have many of the same features as call options, such as the right to buy a security at a specific price. However warrants are issued by the company, while exchange-traded options are written by independent investors. Also warrants generally have a much longer life.

Weekly Stock Chart, or simply Weekly Chart

Normally refers to a chart which details a single stock’s price movement during a week of trading. Weekly Stock Charts vary in appearance and content depending on the preparer, but generally include the high, low, opening and closing prices of the stock. Of course, the term “Weekly Chart” can be used to describe the tracking of almost anything.

Windfall Shares

Free shares given to company insiders. This term is most often associated with the conversion of a “mutual” society or organization (an organization that is owned by its customers) to a public company. The new stockholders then can trade their shares in a public market.

Xetra

One of the world’s first electronic trading systems, based in Frankfurt, Germany. This system is the backbone of the Frankfurt Stock Exchange and is also used in other countries.

Yield Advantage

In a corporation, the additional current return from holding a convertible security versus owning the stock into which the convertible can be exchanged. This helps investors determine whether they should buy a convertible security or the common stock of a company, and thereafter to determine whether they should keep the convertible security exercise their option to convert.

Zero-Bound

Stock that is moving downward quickly and is expected to move to zero. The term also refers to when the Federal Reserve has lowered short term interest rates to zero or near zero and can no longer use lower interest rates for economic stimulus.