Then, copy that formula down for the rest of your stocks. But, as I said, dividends can make a huge contribution to the returns received for a particular stock. Also, you can insert charts and diagrams to understand the distribution of your investment portfolio, and what makes up your overall returns. If you have data on one sheet in Excel that you would like to copy to a different sheet, you can select, copy, and paste the data into a new location. A good place to start would be the Nasdaq Dividend History page. You should keep in mind that certain categories of bonds offer high returns similar to stocks, but these bonds, known as high-yield or junk bonds, also carry higher risk.
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All investments involve some degree of risk. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks. Every saving and investment product has different risks and returns. Differences include: how readily investors can get their money when they need it, how fast their money will grow, and how safe their money will be.
In this section, we are going to talk about a number of risks investors face. They include: Business Risk With a stock, you are purchasing a piece of ownership in a company. With a bond, you are loaning money to a company. Returns from both of these investments require that that the company stays in business. If a company goes bankrupt and its assets are liquidated, common stockholders are the last in line to share in the proceeds.
If you are a common stockholder, you get whatever is left, which may be nothing. If you are purchasing an annuity make sure you consider the financial strength of the insurance company issuing the annuity. You want to be sure that the company will still be around, and financially sound, during your payout phase. Large company stocks as a group, for example, have lost money on average about one out of every three years. Market fluctuations can be unnerving to some investors.
Inflation Risk Inflation is a general upward movement of prices. Inflation reduces purchasing power, which is a risk for investors receiving a fixed rate of interest. Index - An investment index tracks the performance of many investments as a way of measuring the overall performance of a particular investment type or category.
It tracks the performance of large U. Inflation - A rise in the prices of goods and services, often equated with loss of purchasing power. Interest rate - The fixed amount of money that an issuer agrees to pay the bondholders. It is most often a percentage of the face value of the bond.
Interest rates constitute one of the self-regulating mechanisms of the market, falling in response to economic weakness and rising on strength. Interest-rate risk - The possibility of a reduction in the value of a security, especially a bond, resulting from a rise in interest rates.
Investment advisor - An organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices. Investment company - A corporation, trust or partnership that invests pooled shareholder dollars in securities appropriate to the organization's objective.
Mutual funds, closed-end funds and unit investment trusts are the three types of investment companies. Investment grade bonds - A bond generally considered suitable for purchase by prudent investors. Investment objective - The goal of a mutual fund and its shareholders, e. In exchange for signing a letter of intent, the shareholder would often qualify for reduced sales charges.
A letter of intent is not a contract and cannot be enforced, it is just a document stating serious intent to carry out certain business activities. The performance of all mutual funds is ranked quarterly and annually, by type of fund such as aggressive growth fund or income fund. Mutual fund managers try to beat the industry average as well as the other funds in their category.
Liquidity - The ability to have ready access to invested money. Mutual funds are liquid because their shares can be redeemed for current value which may be more or less than the original cost on any business day. Loads back-end, front-end and no-load - Sales charges on mutual funds.
A back-end load is assessed at redemption see contingent deferred sales charge , while a front-end load is paid at the time of purchase. No-load funds are free of sales charges. Long-term investment strategy - A strategy that looks past the day-to-day fluctuations of the stock and bond markets and responds to fundamental changes in the financial markets or the economy. Market price - The current price of an asset.
Market risk - The possibility that an investment will not achieve its target. Market timing - A risky investment strategy that calls for buying and selling securities in anticipation of market conditions. Maturity - The date specified in a note or bond on which the debt is due and payable. Maturity distribution - The breakdown of a portfolio's assets based on the time frame when the investments will mature.
Median Market Cap - The midpoint of market capitalization market price multiplied by the number of shares outstanding of the stocks in a portfolio, where half the stocks have higher market capitalization and half have lower. Money market mutual fund - A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year and other conservative investments.
Morningstar ratings - System for rating open- and closed-end mutual funds and annuities by Morningstar Inc. The system rates funds from one to five stars, using a risk-adjusted performance rating in which performance equals total return of the fund. Mutual fund - Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.
NASDAQ is a computerized system that provides brokers and dealers with price quotations for securities traded over-the-counter as well as for many New York Stock Exchange listed securities. The fund's NAV is calculated daily by taking the fund's total assets, subtracting the fund's liabilities, and dividing by the number of shares outstanding.
The NAV does not include the sales charge. The process of calculating the NAV is called pricing. Number of Holdings - Total number of individual securities in a fund or portfolio. For a stock portfolio, the ratio is the weighted average price-to-book ratio of the stocks it holds. Par value - Par value is the amount originally paid for a bond and the amount that will be repaid at maturity. Portfolio - A collection of investments owned by one organization or individual, and managed as a collective whole with specific investment goals in mind.
Portfolio allocation - Amount of assets in a portfolio specifically designated for a certain type of investment. Portfolio holdings - Investments included in a portfolio. Portfolio manager - The person or entity responsible for making investment decisions of the portfolio to meet the specific investment objective or goal of the portfolio.
Positive tilt - An investment process which tilt a fund of portfolio toward a specific sector, company, or project based on specific values or norms-based criteria. A sustainable investment style in which the portfolio will be tilted toward sectors, companies, or projects with positive ESG characteristics. There are several kinds of preferred stock, among them adjustable-rate and convertible.
Premium - The amount by which a bond or stock sells above its par value. Price-to-book - The price per share of a stock divided by its book value net worth per share. Prospectus - Formal written offer to sell securities that sets forth the plan for proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision. Prospectuses are also issued by mutual funds, containing information required by the SEC, such as history, background of managers, fund objectives and policies, financial statement, risks, services and fees.
Proxy - A shareholder vote on matters that require shareholders' approval. Public offering price POP - A mutual fund share's purchase price, including sales charges. A fund with an R2 of means that percent of the fund's movement can completely be explained by movements in the fund's external index benchmark.
Ratings - Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities. Recession - A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country's gross domestic product.
Redemption - Sale of mutual fund shares by a shareholder. Reinvestment option - Refers to an arrangement under which a mutual fund will apply dividends or capital gains distributions for its shareholders toward the purchase of additional shares. Relative risk and potential return - The amount of potential return from an investment as related to the amount of risk you are willing to accept.
Renewable Energy Certificates RECs - A market-based instrument that is issued when one megawatt-hour of electricity is generated and delivered to the electricity grid from a renewable energy resource. Rights of accumulation - The right to buy over a period of time. For example, this might be done by an institutional investor to avoid making a single substantial purchase that might drive up the market price, or by a retail investor who wants to reduce risk by dollar cost averaging.
Risk tolerance - The degree to which you can tolerate volatility in your investment values. By regulation, a mutual fund sales charge may not exceed 8. The charge may vary depending on the amount invested and the fund chosen. A sales charge or load is reflected in the asked or offering price. See loads. Sector - A group of similar securities, such as equities in a specific industry.
Sector breakdown - Breakdown of securities in a portfolio by industry categories. Securities - Another name for investments such as stocks or bonds. The name 'securities' comes from the documents that certify an investor's ownership of particular stocks or bonds. Securities and Exchange Commission SEC - The federal agency created by the Securities and Exchange Act of that administers the laws governing the securities industry, including the registration and distribution of mutual fund shares.
Share - A unit of ownership in an investment, such as a share of a stock or a mutual fund. Share class net assets date - Fund assets included in a specific share class. 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. Sharpe Ratio - A risk-adjusted measure that measures reward per unit of risk.
The higher the sharpe ratio, the better. The numerator is the difference between the Fund's annualized return and the annualized return of the risk-free instrument T-Bills. Short-term investment - Asset purchased with an investment life of less than a year. Standard Deviation - A statistical measure of the degree to which an individual value in a probability distribution tends to vary from the mean of the distribution. Statement of additional information SAI - The supplementary document to a prospectus that contains more detailed information about a mutual fund; also known as 'Part B' of the prospectus.
Stock - A long-term, growth-oriented investment representing ownership in a company; also known as 'equity. Also called 'shareholder. Sustainability Bonds - Bond instrument where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects. Sustainable Development Goals SDGs - A United Nations Initiative for all countries to adopt 17 goals that address global challenges including poverty, inequality, climate change, environmental degradation, and peace and justice.
Sustainable investing - A forward-looking investment approach that aims to deliver long-term sustainable financial return in a fast changing world. It encompasses a wide ranging spectrum of approaches, the core of which starts with the incorporation of ESG information. Systematic investment plan - A service option that allows investors to buy mutual fund shares on a regular schedule, usually through bank account deductions.
Tax-exempt income - Tax-exempt income is income that is exempt from income taxes. A purchaser of state municipal bonds is exempt from federal taxation on the income earned from the bonds. Thematic: An investment process that focuses on themes or assets specifically related to topic selected based on specific values or norms-based criteria.
A sustainable investment style that focuses on themes or assets specifically related to sustainability, such as renewable energy, water or healthcare. Time horizon - The amount of time that you expect to stay invested in an asset or security. Top 10 holdings - Ten largest holdings in a portfolio based on asset value.
Top 10 long and short positions - The top 10 holdings ranked by market value in each position category long and short. A long position is one in which an investor buys shares of stock and as an equity holder will profit if the price of the stock rises. With a short position an investor will sell shares of stock that they do not own but have borrowed.
The investor in a short position will profit if the price of the stock falls. Top five contributors - Top five industries in a portfolio based on amount of invested assets. Top five detractors - Five assets in a portfolio that generated largest negative returns losses.
Top five holdings - Top five securities in a portfolio based on amount of invested assets. Top five industries - Top five industries in a portfolio based on amount of invested assets. Total return - Accounts for all of the dividends and interest earned before deductions for fees and expenses, in addition to any changes in the value of the principal, including share price, assuming the funds' dividends and capital gains are reinvested.
Also, a method of calculating an investment's return that takes share price changes and dividends into account. Tracking Error - The active risk of the portfolio. It determines the annualized standard deviation of the excess returns between the portfolio and the benchmark. Transfer agent - An agent, usually a commercial bank, appointed to monitor records of stocks, bonds and shareholders. A transfer agent keeps a record of the name of each registered shareholder, his or her address, the number of shares owned, and sees that certificates presented for the transfer are properly canceled and new certificates are issued in the name of the new owner.
Treasury bill - Negotiable short-term one year or less debt obligations issued by the U. Treasury bond - Negotiable long-term 10 years or longer debt obligations issued by the U. Treasury note - Negotiable medium-term one year to 10 years debt obligations issued by the U. Treasury security - Securities issued by the U. Treasury Department and backed by the U.
Trustee - 1. An organization or individual who has responsibility for one or more accounts. An individual who, as part of a fund's board of trustees, has ultimate responsibility for a fund's activities.
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