Investment Types And Terminology

We can give you a plan that’s helped a lot of people like you achieve financial peace. Now that you’ve calculated your estimated retirement savings, your next step is to use a Smartvestor Pro to build your custom retirement plan. This is the amount you add to your retirement savings each month. Of the 37% first-year snapback gain, 20% of the 37% happens within the first 6 to 8 weeks.

Federal Reserve Board – The governing board of the Federal Reserve System, it regulates the nation’s money supply by setting the discount rate, tightening or easing the availability of credit in the economy. Federal Funds Rate – The interest rate charged by banks with excess reserves at a Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. Ex-Dividend date – The date on which a stock goes ex-dividend. Typically about three weeks before the dividend is paid to shareholders of record. Ex-Dividend – The interval between the announcement and the payment of the next dividend for a stock. Default – Failure of a debtor to make timely payments of interest and principal as they come due or to meet some other provision of a bond indenture.

Share classes – Classes represent ownership in the same fund but charge different fees. This can enable shareholders to choose the type of fee structure that best suits their particular needs. Sector breakdown – Breakdown of securities in a portfolio by industry categories. R2 – The percentage of a fund’s movements that result from movements in the index ranging from 0 to 100.

From the day each crash hit the lowest point, the average market gain over the following 12- month period was 37%. Stock markets sometimes “crash” and can lose more than 20% in value. Declines of more than 10% are called “corrections” and at least one correction per calendar year is to be expected. J. P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. The dividend or interest paid by a company expressed as a percentage of the current price. Sharpe Ratio – A risk-adjusted measure that measures reward per unit of risk. The numerator is the difference between the Fund’s annualized return and the annualized return of the risk-free instrument (T-Bills).

What matters is being able to adequately answer all the questions with a realistic range of values. Since we say a dollar in your hand today is worth more to you than a dollar in the future, you also have to discount or measure the value that those expected future cash flows are worth to you today.

Basic Investment

A fund with an R2 of 100 means that 100 percent of the fund’s movement can completely be explained by movements in the fund’s external index benchmark. P/E Ratio – Price of a stock divided by its projected earnings for the coming year. P/E Ratio – Price of a stock divided by its earnings from the latest year. Premium – The amount by which a bond or stock sells above its par value. Interest-rate risk – The possibility of a reduction in the value of a security, especially a bond, resulting from a rise in interest rates.