Glossary of Terms
- Active Investing
Making investing decisions with the expectation of earning better returns than average.
- Annual Expense Ratio (Expense Ratio)
The annual fee charged by investment companies for managing the funds, stated as a percentage of total assets under management.
- Asset Allocation
The process of allocating one's funds to the major asset categories such as stocks, bonds, cash equivalents, real estate, gold, and so forth. The percentages add up to 100 percent.
- Bond Index Fund
A mutual fund holding bonds designed to match the performance of a stated bond index.
- Capital Gain
The difference between the net sales price of a security and its net cost (sometimes called the basis). The capital gain arises because the sales price is greater ...