Frequently Asked Questions

Frequently Asked Question button

Net Asset Value or NAV, is a mutual fund term. The NAV is the price per share at which the mutual fund is valued. It is based on the value of all its holdings divided by the number of mutual fund shares outstanding.

The Net Asset Value of a mutual fund is not fixed; it is calculated based on the net value of the securities or other investments it holds and also for any liabilities the mutual fund owes.

Most mutual funds NAV is set once per day at the close of the trading day. The NAV is the price per share you will pay when buying shares in the mutual fund or the price you will realize when you are selling shares in the mutual fund.


Category: Investing

There are many “benchmark indexes” that are used as indicators of performance. They represent a select group of stocks, bonds or other assets that are identified and used as a “benchmark” against which to track your investment portfolio’s performance.

Once the group of assets is identified, they are not actively managed, simply tracked and reported by the Index management firm. Investors use the index results to measure the relative performance of similar assets in their own portfolios.

There are many different indexes. Benchmark Index examples include: Russell 2000, S & P 500, MSCI EAFE index, NASDAQ Composite and Barclays Capital Aggregate Bond Index.


Category: Investing

Due diligence about your broker & the brokerage firm she works for is an important part of keeping your money safe. The easiest place to start the research is on the FINRA site.

The Financial Industry Regulatory Authority (FINRA) provides a Broker Check service to look up the work and complaint history of regulated firms and brokers.

You’ll be able to check licensing status and other information on the FINRA site.

Doing an online search for pertinent professional information and checking with relevant state licensing boards is also an avenue to pursue.

Additional due diligence such as checking referrals and past performance should be performed before handing over your money to an Investment Advisor.


Category: Investing

DJIA 200-Day Moving Average words highlighted on the white backgroundIt is an investment term that it used to assess stock performance over a period of time, in this case 200 days.

A 200 day Moving Average is shown on a chart & tracks the average price of a stock during a particular 200 day long period. Moving averages can also be charted for other date ranges.

It’s a type of Technical Indicator & technical traders use it (among other indicators) to assess when to buy or sell a stock position.


Category: Investing

12b-1-mutual-fund-feesMutual Fund companies charge fees to cover their operational & marketing expenses.

The 12b-1 fee covers distribution & marketing costs incurred by the fund, including commissions paid to brokers.

12b-1 fees are included in the calculation of the Expense Ratio for the mutual fund and are required to be disclosed in the Prospectus for the fund. These fees are charged as a percentage of the assets in the fund.

All fees reduce your overall annual returns and can vary widely from one fund to another, so prudent investors research fees before investing in a fund.

Some funds temporarily reduce or eliminate 12b-1 fees as a way to lower fees & show improved returns, but be careful because these fee reductions will expire at some point & reduce your returns accordingly.


Categories: Investing, Investments

Business acronym ETF as Exchange-traded fund. Financial background.ETF stands for Exchange Traded Fund. It is a type of publicly traded investment, consisting of a group of underlying assets, usually stocks or bonds.

ETFs can be traded like stocks or bonds and their value fluctuates based on the values of the underlying assets.

Some ETFs use leverage or other strategies to increase their yield, so it is important to thoroughly understand ETFs & their risks before investing in them.


Category: Investing

bear-marketBear Markets are stock markets that are trending down over a period of time.

When prices drop by 20% from the previous high point in the market, investors identify it as a Bear market.

Investors who have a gloomy outlook about investing trends, are considered to be “Bearish.”


dogs-of-the-dowDogs of the Dow is an investment strategy for buying and selling dividend paying stocks.

This strategy uses a stock’s Dividend Ratio as the basis for decisions to buy or sell.

Investors purchase the 10 stocks in the Dow Jones Industrial Average (DJIA) that have the highest dividend payout ratio. Each year investors buy, hold or sell their stocks according to the stocks’ latest divided ratios.

Investors who use dividend payout strategies are looking at the total annual yield on the stock, including both dividends & capital appreciation.


bond-rating-agenciesBonds are a form of long term debt and investors who own them need to know about the financial stability of the issuer and its ability to repay the debt.

Rating agencies evaluate the financial strength of bond issuers (governments and corporations) and issue an alpha numeric rating that indicates the level of risk associated with the bond.

The three rating agencies that are often referenced are:

Standard & Poor’s
Fitch Ratings

Each rating agency has a slightly different rating scale (e.g., AAA, BBB, aa1) that quickly illustrates their opinion of the relative financial risk associated with the bond.

Bond ratings affect the interest rate paid and also indicate whether the bond is considered investment grade or non-investment grade (higher risk to the bond investor).


Conceptual 3D render image with a frameless Compass focus on a single wordA Bull Market is a market that is trending UP over a prolonged period of time.

The term Bull Market can be applied to different types of asset classes (e.g., stocks, commodities, bonds) that are publicly traded.


Category: Investing

dow-jones-industrial-index-djiaCommonly referred to as the “Dow” or Dow Industrials” this stock index tracks the performance of 30 large companies in a variety of industries, including telecommunications, retail & consumer goods.

It was first created in 1896 by Dow Jones & Company, the publisher of the Wall Street Journal.

The individual stocks that make up the index rarely change, but they can and do change based on the parameters of the Index and changes in the companies represented.

To be included, a company must be a leader in its industry, publically traded and held by both individual and institutional investors.


Yes. Bond ETFs are a type of fixed income investment. The basket of bonds in the ETF can be based on specific a bond index or specific type of bond.

There are many options to choose from & they trade intraday like other ETFs.


Category: Investing

Crowdfunding raises capital entirely online from many individual investors. It can be used to fund many things, including a business idea, a research & development project, new product development or for a community or nonprofit cause.

There are various sites which are used to handle the process, some for business related funding and others for social causes.

Some crowdfunding activities fall under the Securities & Exchange Commission’s rules, so it is important for the parties on both sides of the transaction to understand the legal implications, responsibilities, and risks.


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