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A top performing product, service or person within a category or peer group.The opposite of a bull market.īenchmark - A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund. A market in which prices decline sharply against a background of widespread pessimism, growing unemployment or business recession. The companies selected typically are in different industries and different geographic regions.īear market - A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. A shorter average maturity usually means a less sensitive - and consequently, less volatile - portfolio.īalanced fund - Mutual funds that seek both growth and income in a portfolio with a mix of common stock, preferred stock or bonds.

In general, the longer the average maturity, the greater the fund's sensitivity to interest-rate changes, which means greater price fluctuation. The most common asset classes are stocks, bonds and cash equivalents.Īverage maturity - For a bond fund, the average of the stated maturity dates of the debt securities in the portfolio. Annualized rate of return also can be called compound growth rate.Īppreciation - The increase in value of a financial asset.Īsset allocation - The process of dividing investments among cash, income and growth buckets to optimize the balance between risk and reward based on investment needs.Īsset class - Securities with similar features. Alpha - The amount of return expected from an investment from its inherent value.Īlternative Minimum Tax (AMT) - Federal tax, revamped by the Tax Reform Act of 1986, aimed at ensuring that wealthy individuals, trusts, estates and corporations pay at least some tax.Īnnual report - The yearly audited record of a corporation or a mutual fund's condition and performance that is distributed to shareholders.Īnnualized - A procedure where figures covering a period of less than one year are extended to cover a 12-month period.Īnnualized rate of return - The average annual return over a period of years, taking into account the effect of compounding.