Investing glossary.

A measure of how much an asset tends to move with the overall market.

The largest peak-to-trough drop an asset or portfolio has experienced over a period.

A measure of return earned per unit of risk (volatility) taken.

A risk-adjusted return measure like the Sharpe ratio, but it only penalizes downside volatility — not upside swings.

A measure of how much a series of returns spreads out around its average — the most common proxy for volatility.

An estimate of the most you would expect to lose on a normal bad day, at a chosen confidence level.

How much an asset’s price moves around, up and down, over time.

A company’s share price divided by its earnings per share — how much you pay for each dollar of profit.

A valuation approach that works backwards from the current price to find the growth the market is already assuming.

An assessment of how sustainable a company’s dividend is — whether it can keep paying without strain.

A company’s annual dividend per share divided by its share price, shown as a percentage.

The cut-off date that decides who gets the next dividend — buy on or after it and the seller, not you, receives the payment.

A tax rule that disallows a loss deduction if you buy the same (or a substantially identical) security within 30 days before or after selling it at a loss.

The return a portfolio earns above what its risk exposure alone would predict — the part not explained by the market or common factors.

Compound Annual Growth Rate — the single smoothed annual rate that would take an investment from its start value to its end value over a period.

A measure of how closely two assets move together, from -1 (opposite) to +1 (in lockstep).

The original amount you paid for an investment, used to calculate gains, losses, and taxes.

Spreading money across assets that don’t move in perfect lockstep, so their ups and downs partly cancel and total risk falls.

Investing a fixed amount at regular intervals regardless of price, so you buy more shares when prices are low and fewer when they’re high.

The set of portfolios that offer the highest expected return for each level of risk — the best risk/return trade-offs available from a group of assets.

The annual fee a fund or ETF charges, expressed as a percentage of assets — quietly deducted from returns every year.

Building or analyzing a portfolio around broad return drivers — like value, size, momentum and quality — rather than individual stock stories.

A formula for sizing a bet or position to maximize long-run growth given your edge and the odds — bet more with a bigger edge, never enough to risk ruin.

A technique that runs thousands of randomized scenarios to estimate the range of outcomes a portfolio or plan might produce — and how likely each is.

Periodically adjusting your holdings back to their target weights after market moves shift them.

Selling an investment at a loss to offset taxable gains elsewhere, lowering your tax bill.

A quarterly SEC disclosure of US stock holdings that institutional managers overseeing more than $100M must file — revealing what the big funds own.

A notice an affiliate of a company, such as an executive officer, director or large shareholder, files with the SEC when proposing to sell restricted or control securities under Rule 144 above a size threshold.

The SEC filing in which a company’s officers, directors and 10%-plus owners report a change in their holdings of its stock, generally by the end of the second business day after the trade.

When several company insiders buy their own stock within a short window — a stronger signal than a single purchase.

A contract, instruction or written plan for trading a company’s stock, adopted in advance, that can give an insider an affirmative defense to insider-trading liability if SEC Rule 10b5-1(c) conditions are met.