Financial Dictionary

What Is Market Cap? Market capitalization (Market Cap) refers to the value of all outstanding shares of a company's stock at the total dollar market value. Market cap is one way to look at the relative size of a company. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Market Cap", "description": "Market capitalization (Market Cap) refers to the value of all outstanding shares of a company’s stock at the total dollar market value. Market cap

Large Cap Definition Large cap refers to companies with market capitalization of the stocks with market values greater than $10 billion. Examples of large cap companies include, J.P. Morgan, IBM, and Johnson & Johnson.  { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Large Cap", "description": "Large cap refers to companies with market capitalization of the stocks with market values greater than $10 billion. Examples of large cap c

Blue Chip Meaning A blue chip is a high-quality, relatively low-risk investment; it usually refers to stocks of large, well-established companies that have performed well over a long period of time. The term is originally from poker, where the blue chips are the most valuable. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Blue Chip", "description": "A blue chip is a high-quality, relatively low-risk investment; it usually refers to stocks

What Is an ETF? Exchange-traded funds are very similar to mutual funds, except that they trade throughout the day on stock exchanges as if they were stocks. This means you can actually pay more or less than the value of the underlying holdings in the fund.  { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Exchange Traded Funds (ETF)", "description": "Exchange-traded funds are very similar to mutual funds, except that they trade througho

Asset Class Definition Asset classes are securities with similar features and financial structure. These securities are also held to the same laws and regulations. The most common asset classes are stocks, bonds, and cash equivalents.  { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Asset Class", "description": "Asset classes are securities with similar features and financial structure. These securities are also held to the same laws a

What Is an Executor? An executor, also called an executor of estate or executor of will, manages your estate after death. It is often a temporary and relatively short-term position, but can be time-intensive. It is referred to as “personal representative” in some states. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Executor", "description": "An executor, also called an executor of estate or executor of will, manages your estate after dea

Fiduciary Definition A fiduciary is a person (or entity) who acts on behalf of another party and who must put that party’s interests ahead of their own. Typically, people who make financial, medical, or legal decisions on another’s behalf are fiduciaries. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Fiduciary", "description": "A fiduciary is a person (or entity) who acts on behalf of another party and who must put that party’s interests

What is An IRA? An Individual Retirement Account (IRA) is an account that allows you to save for retirement through tax deferred (traditional) or tax-free (Roth) growth. Traditional IRA vs. Roth IRA A traditional IRA allows you to contribute pre-tax income directly into your retirement account. This is called tax-deferred because instead of paying taxes currently, you’ll pay (income) taxes when you withdraw money out of the account. Roth IRA A Roth IRA allows you to contribute income that has a

What are Equities? Equities are shares issued by a company which represent ownership in the company. Ownership of property, usually in the form of common stocks, as distinguished from fixed-income securities such as bonds or mortgages. Stock funds may vary depending on the fund’s investment objective. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Equities", "description": "Equities are shares issued by a company which represent ownership

What is Impact Investing? Impact investing is the process of aligning various preferred values with the generation of financial returns. There are a number of ways investors choose to approach impact investing, all largely dependent on what values investors choose to align with. While the most commonly understood use of impact investing is an emphasis on support for environmentally-friendly investments, other themes include: { "@context": "https://schema.org", "@type": "DefinedTerm", "@

What is a Trust? A trust is a legal relationship where the owner, or trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. A trust is traditionally used for minimizing estate taxes and offers other benefits as a part of an estate plan. { "@context": "https://schema.org", "@type": "DefinedTerm", "@id": "DefinedTerm", "name": "Trust", "description": "A trust is a legal relationship where the owner, o

What is RMD Required Minimum Distributions (RMDs) are withdrawals that the IRS requires you to take from tax-deferred accounts (such as IRAs) each year. These withdrawals can be done in a lump sum, or can be taken out gradually over the year, but the RMD must be reached by December 31st of that year. You must begin taking RMDs by April 1st of the year following your 72nd birthday and then annually thereafter. The RMDs are taxed at ordinary income tax rates. See more about RMDs on the