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What is Asset Allocation? Asset allocation is the process of dividing investments among cash, equities (ex. U.S. Large Cap, International), fixed income (ex. Taxable, Municipal) and cash equivalents to optimize the balance between risk and reward based on investment needs. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Asset Allocation", "description": "Asset allocation is the process of dividing investments among cash, equities (ex. U.S.

What is a Basis Point? A basis point represents one gradation on a 100-point scale representing 1%. This term is used especially in expressing variations in the yields of bonds. Fixed income yields vary often and slightly within one percent and the basis point scale easily expresses these changes in hundredths of 1%. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Basis Points (BPS)", "description": "A basis point represents one gradation o

What is a Bear or Bull Market? A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. The opposite is a bull market, in which prices are advancing in an upward trend. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Bear Market Bull Market", "description": "A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. The opposite is a bull market, i

What is Annualized Rate of Return? Annualized rate of return is the average annual return over a period of years, considering the effect of compounding (also called compound growth rate). { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Annualized Rate of Return", "description": "Annualized rate of return is the average annual return over a period of years, considering the effect of compounding (also called compound growth rate).", "inDefi

What Is a Bond? A bond acts like a loan or an IOU that is issued by a corporation, municipality, or the U.S. government. The issuer promises to repay the full amount of the loan on a specific date and pay a specified rate of return for the use of the money to the investor at specific time intervals. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Bonds", "description": "A bond acts like a loan or an IOU that is issued by a corporation, muni

What Is a Stock? A stock is a long-term, growth-oriented investment representing ownership in a company; also known as ‘equity.’ How to Invest in Stocks When investing in stocks, you don’t necessarily need a lot of money to get started – you can invest with as little as $50. You can also decide whether to pick and choose stocks individually, have an expert to manage the process, or use your employer’s 401(k). Once you start to invest in stocks, you might want to open an IRA or a brokerage

What Is a Mutual Fund? A mutual fund is a fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market securities. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Mutual Fund", "description": "A mutual fund is a fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities, or money market s

What is a Living Will? A living will provides instructions to your healthcare provider in the event that you are unable to communicate. A living will dictates whether or not you wish to receive medical treatment to prolong your life if you suffer irreversible or terminal injury. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Living Will", "description": "A living will provides instructions to your healthcare provider in the event that you

What Is a Yield Curve? A yield curve is the relationship between interest rates and time, and is determined by plotting the yields of bonds with equal credit quality against their maturities. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Yield Curve", "description": "A yield curve is the relationship between interest rates and time, and is determined by plotting the yields of bonds with equal credit quality against their maturities.", "

Dividend Definition A dividend is a portion of a company’s profit paid to common and preferred shareholders. They provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Dividend", "description": "A dividend is a portion of a company’s profit paid to common and preferred shareholders. They provide an ince

What Is a Benchmark in Finance? Financial benchmarking involves running financial analyses in order to compare business practices and the standards of a firm to other firms within the same industry. A benchmark is a standard, or a baseline, that’s used for comparative purposes when assessing a portfolio or mutual fund. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Benchmark", "description": "Financial benchmarking involves running financi