We've done our best to make the site jargon-free, but some terms are unavoidable. We've included both a quick definition and a link to Investopedia for more detail. Following are a few terms that you may see here but not in your everyday life:
Adviser - refers to the firm, as in Registered Investment Adviser.
Advisor - refers to an individual within a firm, such as Financial Advisor.
Alpha - returns gained independent of market conditions.
Beta - correlation of a security's price movements as compared with the market. A beta of < 1 means its moves have been less than the market's, while > 1 means it has been more volatile.
Correlation - a statistical measure of how two securities move in relation to each other.
Custodian - a financial institution with the legal responsibility for a customer's securities.
Drawdown - the decline in a portfolio's value as measured from its highest value.
Due Diligence - investigation of a potential investment.
Efficient Markets- theory that current prices reflect all available information, thereby offering no opportunity to seek an edge.
Fiduciary - the person who looks after the assets on another's behalf.
Form ADV - a form required by the SEC that specifies an IA firm's investment style, assets under management and key officers of the firm.
Hedge - using options to reduce risk inside a portfolio
Liquid - available for withdrawal immediately, with no lockout period.
Median - the midpoint of a range of data points.
Mean - the average of a range of data points; can have too much influence from a single outlier event.
SIPC - government insurance to protect investor assets from broker bankruptcy or fraud, NOT loss.
Transparency - publicly available pricing information such as a stock, option, or mutual fund.
Volatility - the range of movement of a security.
