Asset allocation
The mix, or allocation, of different investments (such as stocks, bonds or cash) that make up an investor's overall portfolio.

Benchmark
A standard (such as an index, a different portfolio, a target return, or a range of returns) that is used to measure rate of return or risk.

Capital gain
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year), and must be claimed on income taxes.

Capitalization
Measure of an issuer's equity market value. Calculated by multiplying the total common shares outstanding by the market price of common stock.

Concentrated positions
A concentrated position occurs if a single security makes up a large percentage of a portfolio and or your net worth. Portfolios may also be considered "concentrated" if they hold fewer than 15 securities or are over weighted in a certain sector.

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Diversification
A mix of investments (such as stocks or bonds) within a portfolio that's designed to minimize the impact of any one security on overall performance. Diversification does not guarantee against a loss.

Expense ratio
The percentage of total assets used to cover expenses (such as management fees and operating expenses) associated with the operation of a mutual fund. This amount is taken out of the fund's assets and lowers the return that fund holders achieve.

Fiduciary
Someone, like a Financial Advisor, who has a legal or ethical duty to monitor your assets according to your best interests.

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Investment goals
The financial objectives that are established by you and your Financial Advisor.

Investment Policy Statement (IPS)
A written document that outlines the objectives, guidelines, and restrictions for a separately managed account.

Investment style
The manner in which an investment manager analyzes, purchases and sells securities; it refers to how individual securities are selected and/or the types of instruments purchased. Examples include: Large Cap Value and Large Cap Growth.

Liquidity
The degree to which an investment can be quickly and easily converted to cash without affecting its value.

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Market capitalization
The average market value of the companies held in an investment portfolio.

Objectives
A set of future expectations or goals which helps guide an investor's portfolio strategy.

Overlay portfolio management
A process used in multiple style accounts by which managers monitor portfolios for sector overweights, securities overlap, and concentrated positions, seeking to avoid redundancies and unnecessary risk as needed on an ongoing basis.

Sector overweight
A high concentration of securities in the same industry or market.

Time horizon
The time period used to measure investment results.

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