An investment strategy that aims to balance risk, and reward, by apportioning portfolio assets according to an individual’s goals, risk for tolerance and investment horizon.
An investment outside the three traditional asset types (stocks, bonds and cash) including hedge funds, managed futures, commodities and derivatives.
Annual Dividend Yield
The return on investment for a stock
Asset Allocation Strategy
An investment strategy that involves periodically rebalancing the portfolio in order to reach a long-term goal.
A group of securities that exhibit similar characteristics, and behave similarly, in the marketplace.
An strategy to prevent the loss of an investment’s total value and produce a return at least equal to the rate of inflation.
An independent examination, and evaluation, of the financial statements of an individual or organization.
A standard or point of reference against which things may be compared or assessed.
A security in which an investor loans money to an entity, for a defined period of time, at a fixed interest rate.
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price.
A strategy to ensure a portfolio is producing a return that is at least equal to inflation.
Certified Financial Planner—CFP
Official designation of an individual who has successfully completed certification requirements of the Certified Financial Planner Board of Standards, Inc. Recognized as the standard of excellence for competent and ethical personal financial planning.
Certified Pension Consultant—CPC
Designation conferred by American Society of Professional Pension Actuaries (ASPPA) to benefits professionals with at least three years of pension consulting experience and who have demonstrated competence in various aspects of pension and related employee benefits consulting. CPCs work alongside employers to formulate, implement, administer and maintain qualified retirement plans.
Certified Public Accountant—CPA
A designation granted by the American Institute of Certified Public Accountants to those who have passed the Uniform CPA Examination and met educational, experience and ethical requirements. CPAs help ensure that professional standards for the industry are enforced.
Certified Securities Operations Professional—CSOP
Certification designed to recognize professionals working in wealth management and trust organizations who are competent in securities operations. This designation is granted by the American Bankers Association to those who have met experience and education requirements and who have proven knowledge in securities, regulation and compliance, audit, controls and reconciliation.
Certified Senior Advisor—CSA
Professional credentialing of the Society of Certified Senior Advisors.
Certified Trust and Financial Advisor—CTFA
A professional credential offered by the American Bankers Association to financial professionals who have demonstrated knowledge and experience in the trust and advisory fields.
Certified Wealth Strategist—CWS
Professional certification by Cannon Financial Institute.
Chartered Financial Analyst—CFA
A professional designation awarded by the CFA Institute to those who have successfully completed its graduate level program. This is globally recognized as the definitive standard by which to measure investment professionals.
Basic goods, such as grains, gold, beef, oil and natural gas, used in commerce that are interchangeable with other commodities of the same type.
To be in accordance with a law, ruling or other generally-accepted practice.
Consumer Price Index
A measure associated with the cost of living that examines the weighted average of prices of a group of consumer goods and services, such as transportation, food and medical care.
A risk management technique that mixes a wide variety of investments, within a portfolio, in order to produce higher returns and lower volatility than an individual investment.
The process of applying a secret code to important data so that it cannot be accessed by unauthorized persons.
Equity Investment/Equity Sector
A stock or any other security which represents an ownership interest.
A plan that serves to manage an individual’s assets in the event of incapacitation or death.
An individual or corporation appointed to administrate the estate of a deceased person.
A measure of what it costs an investment company to operate a mutual fund.
A chart or list showing the dollar amounts that a business charges for various services or activities.
An advisor’s compensation based solely on a set percentage of the client’s assets.
A person to whom property or power is entrusted for the benefit of another. A fiduciary is required to put the other person’s interests ahead of his/her own.
The process by which a firm constructs a financial representation, of some or all aspects of financial events, which provides direction regarding possible action or alternatives.
A device, or series of devices, that separate, and secure internal networks, from unauthorized external access.
An aggressively managed portfolio of investments that uses advanced investment strategies, such as leveraged, long, short and derivative positions in both domestic and international markets, in order to generate high returns.
High Net Worth
A classification by the financial services industry to denote an individual or family with liquid assets over a certain figure. The most commonly quoted figure is $1 million.
The rate at which the price for goods and services is rising and, subsequently, purchasing power is falling.
A measure of the return on an investment after subtracting inflation.
An investor’s guide to making investment decisions based on risk tolerance, time horizon and future needs for capital. Incorporates asset allocation and buy and sell guidelines.
Incorporating the financial goals of an investor into an optimal portfolio mix. Risk tolerance, cash needs, tax situation and time horizon are all considered.
A document drafted between a portfolio manager and a client that outlines general rules for the manager.
The degree to which an asset can be bought or sold in the market without affecting the asset’s price. Liquid assets are easily bought or sold
An alternative investment strategy in which professional portfolio managers use futures contracts to provide portfolio diversification to help mitigate risk.
All markets are cyclical. They increase, peak, decline and then hit a low point, or trough. When one cycle is finished, the next begins. Full market cycles are often measured from peak to peak or from trough to trough.
An aggregate value of several stocks that expresses their total value against a base value, from a specific date, with the intent of tracking the market’s changes over time.
Money Managers — also known as ‘portfolio manager’ or ‘investment manager. A professional responsible for managing the investment portfolio of an individual or institutional investor.
Financial instruments with high liquidity and very short maturities, often seen as a safe place to keep money for the short term.
An investment vehicle that is made up of funds from many investors which are invested to produce capital gains and income for the fund’s investors.
Negative Real Return
A financial loss, after inflation, on an investment during a specific period of time.
The use of software patches to fix problems, or update a computer program of its supporting data, including fixing security vulnerabilities.
Security testing, also known as ethical hacking, in which the evaluators attempt to circumvent the security features of a computing environment, in order to insure the security of a computer system.
A risk management technique, in which an investor holds a wide variety of investments within a portfolio in order to produce higher returns and lower risk.
Price Earnings Ratios
A valuation ratio of a company’s current share price compared to its earnings per share.
A measure of how much per dollar of sales a company keeps in earnings.
Qualified Pension Administrator—QPA
Credential created by the ASPPA to recognize professionals qualified to perform the technical and administrative functions of qualified plan administration. QPAs assist employers, actuaries and consultants in performing functions such as determination of eligibility benefits, computation of benefits, plan recordkeeping, trust accounting and disclosure and compliance requirements.
Real Rate Return
The annual percentage of return on an investment less inflation.
Real Sales Growth
Sales growth less inflation.
Return/Rate of Return
The gain or loss on an investment over a specified period, expressed as a percentage increase over the initial investment cost.
Reversion to the Mean
An investment philosophy suggesting that asset prices and returns eventually return toward a long-term mean or average.
The process of identifying, analyzing and either accepting—or working to minimize—the uncertainty in investment decision-making.
A return measure after adjusting for volatility.
An index of the prices of 500 large-company common stocks, considered a leading indicator for the American economy.
Trading securities with an above-average degree of risk in return for above-average profit potential, within a timeframe of under a year.
A group of stable investments which are resistant to volatility.
Strategic Asset Allocation
An investment strategy that involves periodically rebalancing the portfolio in order to maintain a long term goal.
Tactical Asset Allocation
An active management portfolio strategy that varies weightings in asset classes based on valuation and economic outlook.
The total amount of tax that an investor is legally obligated to pay on investment earnings.
Investments that do not incur the typical tax consequences of other investments.
An individual (or business) which holds or manages assets for the benefit of another.
A financial security or other type of investment that is selling for a price presumed to be below the investment’s true intrinsic value.
The process of determining the current worth of an asset or company.