Tag: mutual

Discount To Net Asset Value definition explanation

What is Discount To Net Asset Value?
A pricing situation that occurs with a closed-end mutual fund when its market price is currently lower than the net asset value of its components. Discounts can occur in times where the market has a pessimistic future outlook and fund investors have started to sell their holdings.

Also known as “”discount to NAV””. Read more for examples and further explanation including related video clips and also comments
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Average Cost Basis Method definition explanation

What is Average Cost Basis Method?
A way of calculating cost basis when figuring out gains or losses from a sale of mutual fund shares. This is done by adding up the number of shares owned as well as the total dollar amount of the shares; the dollar amount is divided by the number of shares. This number (the average cost basis) is then multiplied by the number of shares sold and compared to the actual sale amount to compute a gain or loss. Read more for examples and further explanation including related video clips and also comments
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Payable On Death – POD definition explanation

What is Payable On Death – POD?
An arrangement between a bank or credit union and a client that designates beneficiaries to receive all the client’s assets. The immediate transfer of assets is triggered by the death of the client.

Also referred to as a “”totten trust.”” Read more for examples and further explanation including related video clips and also comments
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Long/Short Fund definition explanation

What is Long/Short Fund?
A type of mutual fund that mimics some of the trading strategies typically employed by a hedge fund. Unlike most mutual funds, long/short funds use leverage, derivatives and short positions in an attempt to maximize total returns, regardless of market conditions. The amount of leverage used and the number of derivatives and short positions that long/short funds may contain are limited by law. These funds invest primarily in stocks. Read more for examples and further explanation including related video clips and also comments
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Sector Fund definition explanation

What is Sector Fund?
A stock mutual, exchange-traded or closed-end fund that invests solely in businesses that operate in a particular industry or sector of the economy. Because the holdings of this type of fund are in the same industry, there is an inherent lack of diversification associated with these funds. Read more for examples and further explanation including related video clips and also comments
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National Association of Investors Corporation – NAIC definition explanation

What is National Association of Investors Corporation – NAIC?
A non-profit organization that is dedicated to providing investing education that allows individuals to earn positive long-term returns. The association is based in Michigan, and is comprised of investing clubs along with individual investors from around the United States. Read more for examples and further explanation including related video clips and also comments
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Index definition explanation

What is Index?
A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value.

Stock and bond market indexes are used to construct index mutual funds and exchange-traded funds (ETFs) whose portfolios mirror the components of the index. Read more for examples and further explanation including related video clips and also comments
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Capital Appreciation Fund definition explanation

What is Capital Appreciation Fund?
A mutual fund that attempts to increase asset value primarily through investments in growth stocks. The heavy investment in growth stocks increases the risk associated with these types of funds.

Also called “”aggressive growth fund””. Read more for examples and further explanation including related video clips and also comments
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