Diversification strives to reduce risk by investing in uncorrelated assets. In essence, the term means, "Don't put all your eggs in one basket".
Diversification strives to reduce risk by investing in uncorrelated assets. In essence, the term means, "Don't put all your eggs in one basket".
Investment Risk is the likelihood that an investment's actual return will not meet that investment's expected return.
Asset allocation is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio.
Passive Investing is an investment strategy where an investor uses index funds vs. specifically selected assets.
Active Investing is an investment strategy where an investor, in an effort to outperform "the market", uses specifically selected assets vs. index funds.
Margin enables investors to purchase securities with borrowed money from a broker. "Reg T" establishes the minimum down payment called the “margin”.
Price is the dollar amount at which a security trades. Various types of prices include Bid, Ask, Last, and Close.
A Trade Order is a request to buy or sell a security traded on an exchange (e.g. NYSE). The main order types are market order, limit order & stop order.
A joint account is a bank or investment/brokerage account shared between two or more adults (Tenants). Any Tenant can enact transactions.
To pay for education-related expenses, an Education Savings Plan offers an advantage(s) over traditional savings accounts.
A Performance Measure quantifies money returned to an investor for a given asset.
A Broker is in the business of buying & selling securities on behalf of others. A Dealer does so on its own behalf.
A Benchmark is a standard by which a security’s performance is compared. A Benchmark is usually an index of securities of the same or similar class.
For bonds of the same credit quality, the Yield Curve is a graphical representation of yields versus maturities.
Monetary Policy is used by central banks to control the supply of money and thus, economic conditions.
A Custodian provides safekeeping of assets. In addition, they also provide account administration, record keeping, and statement & tax reporting.
A Commission is a form of compensation that a Broker or Sales Agent charges for each transaction. Commissions have inherit conflicts of interest.
A Financial Advisor is any person who engages in the business of providing advice with respect to investing in securities.
A Security (e.g. stock, bond, etc.) is a financial instrument representing a legal agreement, document or certification that has intrinsic monetary value.
A Business Cycle represents the cyclical nature of economic expansions and contractions as measured by GDP growth over time.