Actively managing a portfolio with the goal of outperforming the market. Active investors make frequent trades and investment decisions based on market analysis and research. Read More>>

The strategic distribution of investments across various asset classes (stocks, bonds, cash) within a portfolio to achieve diversification and manage risk. Read More>>

A group of securities with similar characteristics and behaviors. Common asset classes include stocks, bonds, and cash equivalents. Read More >>

A market condition characterized by a prolonged decline in stock prices, usually accompanied by widespread pessimism among investors.

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Having a pessimistic outlook on the market or a particular asset, expecting prices to fall. Read More >>

Shares of large, well-established companies with a history of stable earnings, reliable dividends, and a strong market presence. 

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A fixed-income security representing a loan made by an investor to a borrower (typically a government or corporation) in exchange for periodic interest payments and the return of principal at maturity. Read More >>

A market condition characterized by a sustained rise in stock prices, often accompanied by optimism and confidence among investors.

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Having an optimistic outlook on the market or a particular asset, expecting prices to rise. Read More >>

The profit earned from the sale of an asset for a price higher than its purchase price. Read More >>

Physical goods or raw materials traded on exchanges, such as gold, oil, or agricultural products. Read More >>

A payment made by a corporation to its shareholders, usually in the form of cash or additional shares, representing a portion of the company's profits. Read More >>

The annual dividend income as a percentage of the current market price of a stock. Read More >>

A systematic investment strategy where an investor purchases a fixed dollar amount of a particular investment at regular intervals, regardless of the asset's price. Read More >>

A type of investment fund traded on stock exchanges, representing a collection of assets such as stocks, bonds, or commodities. Read More >>

A method of evaluating a security's intrinsic value by analyzing financial and economic factors, including earnings, revenue, and market conditions. Read More >>

An investment fund that employs various strategies to generate returns for its investors, often by using derivatives, leverage, and short-selling. Read More >>

The first sale of a company's stock to the public, marking the transition from private to public ownership. Read More >>

Refers to companies with a large market capitalization, often characterized by stable revenues and substantial market presence. Read More >>

An order to buy or sell a security at a specified price or better. The trade will only be executed at the specified price or a more favorable one. Read More >>

The total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of shares. Read More >>

A benchmark that measures and represents the performance of a specific group of stocks or bonds in the financial market. Read More >>

An order to buy or sell a security at the current market price, executed immediately. Read More >>

An investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Read More >>

Financial contracts that give the buyer the right (but not the obligation) to buy or sell an asset at a predetermined price within a specified timeframe. Read More >>

The ratio of a company's current share price to its earnings per share (EPS), providing insights into its valuation. Read More >>

An investment strategy that aims to replicate the performance of a market index by holding a diversified portfolio of securities. Read More >>

Spreading investments across different assets or asset classes to reduce risk and potential losses. Read More >>

A legal document provided by mutual funds, ETFs, and other securities issuers, detailing the investment's objectives, risks, and terms. Read More >>

A measure of the profitability of an investment, calculated as the gain or loss relative to the initial investment amount. Read More >>

A measure of investment performance that considers the level of risk taken to achieve a certain return. Read More >>

An individual's ability and willingness to withstand fluctuations in the value of their investments. Read More >>

A digital platform that provides automated, algorithm-driven financial planning services with minimal human intervention. Read More >>

A group of companies in the same industry or business activity, such as technology, healthcare, or finance. Read More >>

Refers to companies with relatively small or medium market capitalizations, falling between small-cap and large-cap stocks. Read More >>

An investment strategy that considers environmental, social, and governance (ESG) factors in addition to financial returns. Read More >>

A type of security representing ownership in a corporation, entitling the owner to a portion of the company's assets and profits. Read More >>

A corporate action where a company increases its total number of outstanding shares by splitting existing shares, usually to lower the stock price. Read More >>

An order placed with a broker to buy or sell a security once it reaches a specific price, limiting potential losses Read More >>

A method of evaluating securities by analyzing historical price and volume data, often using charts and technical indicators. Read More >>

A statistical measure of the degree of variation of a trading price series over time, indicating the level of price fluctuations. Read More >>

A 401(k) is a tax-advantaged retirement savings plan offered by employers. Employees can contribute a portion of their salary to the plan, and contributions are often matched by the employer. The funds grow tax-deferred until withdrawal in retirement. Read More >>

Similar to a 401(k), a 403(b) is a tax-advantaged retirement plan offered by non-profit organizations and educational institutions. It allows employees to contribute a portion of their salary to the plan for retirement savings. Read More >>

A 457 Plan is a tax-advantaged retirement savings plan available to certain government and non-profit employees. Participants can contribute a portion of their salary, and the funds grow tax-deferred until withdrawal in retirement. Read More >>

An annuity is a financial product that provides a series of payments over a specified period, often used as a source of income in retirement. It can be purchased from an insurance company. Read More >>

A Backdoor Roth IRA is a strategy used by high-income individuals to contribute to a Roth IRA by converting traditional IRA funds. This method involves making non-deductible contributions to a traditional IRA and then converting it to a Roth IRA. Read More >>

A beneficiary is an individual or entity designated to receive assets or benefits in the event of the account holder's death. Beneficiaries are often named in retirement accounts, insurance policies, and wills. Read More >>

Catch-up contributions are additional contributions that individuals aged 50 and older can make to their retirement accounts. These contributions are above the standard limits and are designed to accelerate savings as retirement approaches. Read More >>

A Certified Financial Planner (CFP) is a professional designation for individuals who have completed rigorous education and experience requirements in financial planning. CFPs are trained to provide comprehensive financial advice. Read More >>

The contribution limit is the maximum amount that an individual is allowed to contribute to a retirement account within a specific tax year. This limit varies by account type and is set by tax regulations. Read More >>

Early retirement refers to the decision to retire before the standard retirement age. It often involves careful financial planning to ensure that the individual has sufficient savings to support their lifestyle. Read More >>

An early withdrawal penalty is a fee imposed on individuals who withdraw funds from certain retirement accounts before reaching a specified age (usually 59½). The penalty is in addition to regular income taxes. Read More >>

An emergency fund is a savings reserve set aside to cover unexpected expenses or financial emergencies. It serves as a financial safety net, helping individuals avoid debt in times of crisis. Read More >>

Employer match refers to a company's contribution to an employee's retirement account, often based on the employee's own contributions. It is a valuable benefit that enhances retirement savings. Read More >>

Estate planning involves the process of arranging for the transfer of one's wealth and assets to heirs or beneficiaries after death. It includes wills, trusts, and other legal mechanisms. Read More >>

A fiduciary is an individual or institution legally obligated to act in the best interests of their clients or beneficiaries. Fiduciaries are held to high standards of honesty and integrity.  Read More >>

A Health Savings Account (HSA) is a tax-advantaged savings account for individuals with high-deductible health plans. Contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free. Read More >>

An in-service distribution allows employees to withdraw funds from their retirement accounts while still employed. Not all retirement plans offer in-service distributions, and eligibility criteria may apply. Read More >>

An Individual Retirement Account (IRA) is a personal retirement savings account with tax advantages. There are different types, including traditional IRAs and Roth IRAs, each with its own tax treatment. Read More >>

An Initial Public Offering (IPO) is the first sale of a company's stock to the public. It marks the transition from private to public ownership, allowing investors to buy shares in the newly listed company. Read More >>

Long-Term Care Insurance is a type of insurance that covers the costs of long-term care services, such as nursing home care or home health care. It helps protect assets from the high costs of extended care. Read More >>

Medicaid is a joint federal and state program that provides healthcare coverage to low-income individuals and families. It covers medical expenses and, in some cases, long-term care costs. Read More >>

Medicare is a federal health insurance program primarily for individuals aged 65 and older. It also covers certain younger individuals with disabilities. Read More >>

A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Mutual funds are managed by professional fund managers. Read More >>

A pension is a retirement plan provided by an employer that guarantees a fixed income stream to employees upon retirement. Pensions are less common today, with the rise of defined-contribution plans. Read More >>

Power of Attorney is a legal document that grants an individual (the agent) the authority to act on behalf of another person (the principal) in legal and financial matters. Read More >>

A Qualified Charitable Distribution (QCD) is a direct transfer of funds from an Individual Retirement Account (IRA) to a qualified charity. It allows individuals aged 70½ or older to make tax-free charitable donations. Read More >>

Required Minimum Distribution (RMD) is the minimum amount that individuals with certain retirement accounts must withdraw annually after reaching a specified age (usually 72). Failure to take the RMD results in penalties. Read More >>

A Retirement Savings Calculator is a tool that helps individuals estimate how much they need to save for retirement based on factors such as current age, desired retirement age, and expected expenses. Read More >>

A Rollover IRA is an Individual Retirement Account that receives funds from a qualified retirement plan (e.g., 401(k)) without triggering taxes or penalties. It allows for continued tax-advantaged growth. Read More >>

A Roth 401(k) is a retirement savings plan that combines features of a Roth IRA and a traditional 401(k). Contributions are made with after-tax dollars, and qualified withdrawals in retirement are tax-free. Read More >>

A Roth IRA is an Individual Retirement Account where contributions are made with after-tax dollars. Qualified withdrawals, including earnings, are tax-free, providing a tax advantage in retirement. Read More >>

The Rule of 72 is a formula used to estimate the number of years it takes for an investment to double in value. It is calculated by dividing 72 by the annual rate of return. Read More >>

The Safe Withdrawal Rate is the percentage of a retiree's savings that can be withdrawn annually, adjusted for inflation, without depleting the portfolio too quickly. It is a key consideration in retirement income planning. Read More >>

The Setting Every Community Up for Retirement Enhancement (SECURE) Act is a U.S. law aimed at improving retirement security. It includes provisions related to retirement plan accessibility, contributions, and withdrawals. Read More >>

Sequence of Returns Risk refers to the impact of the order in which investment returns occur. Poor returns early in retirement can significantly affect the sustainability of a portfolio. Read More >>

Social Security is a federal government program that provides financial support to eligible individuals, including retirees, disabled individuals, and survivors. It is funded through payroll taxes. Read More >>

A Spousal IRA is an Individual Retirement Account designed for a non-working spouse. It allows the spouse to make contributions based on the working spouse's income. Read More >>

A Stretch IRA is an estate planning strategy that involves designating a younger beneficiary for an IRA, allowing for the stretching of required minimum distributions (RMDs) and potentially extending tax advantages. Read More >>

A Target-Date Fund is a mutual fund designed to automatically adjust its asset allocation over time, becoming more conservative as the target retirement date approaches. Read More >>

Traditional 401(k) and Roth 401(k) are different types of employer-sponsored retirement plans. Contributions to a Traditional 401(k) are made with pre-tax dollars, while Roth 401(k) contributions are made with after-tax dollars. Read More >>

A Trust is a legal entity that holds and manages assets for the benefit of individuals or entities. Trusts are commonly used in estate planning to control the distribution of assets. Read More >>

Vesting refers to the process by which an employee gains ownership of employer-contributed funds in a retirement account. It typically occurs over a specified period, encouraging employee retention. Read More >>

Assets are anything of value owned by an individual, organization, or entity. Examples include cash, real estate, investments, and personal property. Read More >>

A market condition characterized by a prolonged decline in stock prices, usually accompanied by widespread pessimism among investors.

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A beneficiary is an individual or entity designated to receive assets or benefits, such as an insurance payout or inheritance, in the event of the account holder's death. Read More >>

A budget is a financial plan that outlines income, expenses, and savings goals over a specific period. It helps individuals manage their finances and allocate resources effectively. Read More >>

A market condition characterized by a sustained rise in stock prices, often accompanied by optimism and confidence among investors.

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A Certified Financial Planner (CFP) is a professional designation for individuals who have completed rigorous education and experience requirements in financial planning. CFPs are trained to provide comprehensive financial advice. Read More >>

Compound interest is the interest calculated on both the initial principal and the accumulated interest from previous periods. It allows for exponential growth of savings or investments over time. Read More >>

A credit score is a numerical representation of an individual's creditworthiness, based on credit history, outstanding debts, and other financial behaviors. Lenders use credit scores to assess the risk of lending money. Read More >>

The debt-to-income ratio is a financial metric that compares an individual's monthly debt payments to their gross monthly income. It helps assess the ability to manage debt. Read More >>

Deflation is a sustained decrease in the general price level of goods and services in an economy. It can have various economic impacts, including lower consumer spending. Read More >>

An emergency fund is a savings reserve set aside to cover unexpected expenses or financial emergencies. It serves as a financial safety net, helping individuals avoid debt in times of crisis. Read More >>

Estate planning involves the process of arranging for the transfer of one's wealth and assets to heirs or beneficiaries after death. It includes wills, trusts, and other legal mechanisms. Read More >>

Fee-only financial advisors are compensated solely by client fees, while fee-based advisors may also earn commissions or other compensation from financial products they recommend. Read More >>

A financial advisor is a professional who provides guidance on financial matters, including investments, retirement planning, and overall financial well-being. Read More >>

Inflation is the increase in the general price level of goods and services over time. It erodes purchasing power and affects the cost of living. Read More >>

Liabilities are financial obligations or debts that an individual or organization owes to others. Examples include loans, mortgages, and outstanding bills. Read More >>

Liquidity refers to the ease with which an asset can be converted into cash or quickly sold without affecting its price. Highly liquid assets can be easily traded. Read More >>

Net worth is the difference between an individual's assets and liabilities. It is a measure of overall financial health and wealth. Read More >>

Power of Attorney is a legal document that grants an individual (the agent) the authority to act on behalf of another person (the principal) in legal and financial matters. Read More >>

The time value of money is the concept that the value of money changes over time due to factors such as inflation, interest rates, and the potential for investments to grow. It underscores the importance of considering the timing of cash flows in financial decisions. Read More >>