Passive Income: What It Is and 3 Main Categories. What is passive income category? Passive income is a broad category that includes any type of earnings that do not require active work on your part. This can include earnings from investments, rental income, and even some types of business income. The key to generating passive … Read more
A Capital Allocation Line is a line that shows the relationship between the expected return and standard deviation of a portfolio. The line is created by plotting the expected return and standard deviation of two investment options on a graph. The line starts at the point of the highest expected return and lowest standard deviation … Read more
An exit strategy is a plan for how you will sell your investment in a company or asset. This could be through a sale of your shares to another investor, or through a public offering of the shares. The exit strategy should be decided before you make the investment, so that you know how you … Read more
Performance drag is the percentage of an investment’s return that is lost to fees and expenses. It is a measure of how much an investment’s performance is reduced by the effects of fees and expenses. Fees and expenses can have a significant impact on an investment’s performance over time. They can eat into returns and … Read more
An accumulation period is the period of time during which an investor saves money in order to make a future investment. The length of an accumulation period varies depending on the investment goals of the individual investor. For example, an investor who is saving for a down payment on a house may have a shorter … Read more
The term “back up the truck” is a slang phrase that is used to describe the act of buying a large quantity of a particular asset. The phrase is most commonly used in the context of investing, where an investor may “back up the truck” in order to acquire a large position in a particular … Read more
A defensive investment strategy is one in which an investor seeks to minimize risk by investing in a diversified portfolio of relatively safe, income-producing investments. The goal is to protect the investor’s capital and generate a steady stream of income, while minimizing the volatility of the portfolio. The most common defensive investment strategies include investing … Read more
Gross rate of return is the percentage of total investment return that a investor receives before any deductions or taxes. This is different from the net rate of return, which is the percentage of investment return after all deductions and taxes have been taken out. Gross rate of return is often used to measure the … Read more
