A mutual fund fee, named for the SEC rule that permits it, used to pay for broker-dealer compensation and other distribution costs. If a fund has a 12b-1 fee, it will be disclosed in the fee table of the fund's prospectus.
Represents the average annual return over a period of years, taking into account the effect of compounding.
The process of dividing investments/asset classes among cash, income and growth buckets with the goal of optimizing the balance between risk and reward.
Securities with similar features. The most common asset classes are stocks, bonds and cash equivalents.
For a bond fund or ETF, the average of the stated maturity dates of the debt securities in the portfolio. Also called average weighted maturity. Generally, the longer the average maturity, the greater the fund's sensitivity to interest-rate changes, which means greater price fluctuation. A shorter average maturity usually means a less sensitive - and consequently, less volatile - portfolio.
A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more over at least a 2-month period. A smaller decline of 10-20% is considered a correction. The opposite of a bull market.
A measurement of volatility against an index where 1 is neutral; above 1 is more volatile; and less than 1 is less volatile than the index.
Generally though of as a company that has some characteristics of a growth stock but is maturing as a company. It does not yet have all the characteristics of a value stock.
A high-quality, relatively low-risk investment; the term usually refers to stocks of large, well-established companies that have performed well over a long period. The term Blue Chip is borrowed from poker, where the blue chips are the most valuable.
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.
Any market in which prices are advancing in an upward trend. In general, someone is bullish if they believe the value of a security or market will rise. The opposite of a bear market.
The difference between a security's purchase price and its selling price when the difference is positive.
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