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1. annual turnover - 1.

A measure of how quickly a fund turns over its holdings during

the year. A highly active fund will have a high annual turnover. It is equal to the dollar transaction volume of the trades in one year divided by the total portfolio size, expressed as a percentage.
The percentage rate at which a mutual fund or exchange-traded fund replaces its investment holdings on an annual basis. Turnover is meant to adjust for the inflows and outflows of cash and report on the level of trading activity in the fund.

Annual turnover is a term used when describing the amount of securities removed from a mutual funds holdings during a 12-month period. Tracking a funds annual turnover is a good measure of the funds ability to stick with a long-term trading approach. Another reason a potential investor will want to track the annual turnover is because the higher the annual turnover, the higher the expense ratio for the fund. The annual turnover is calculated by taking the total of all the transactions, dividing it by 2 and then dividing that number by the mutuals funds total holdings. For example, if Mutual Fund A holds 3 stocks and sells one of its holdings in mid-June and now only holds 2 positions. The Annual Turnover would be calculated as follows: 1/3 (running 12-month total of mutual fund holdings) = 33% annual turnover As you can see the annual turnover only covers the shift in positions and not the dollar value of the holdings.
If an investor is looking for a fund that maintains long-term investments, it is a good idea to keep the annual turnover rate below 10%. However, if an investor is looking for a more aggressive investment style, it is better to look for funds with an annual turnover rate of 75% or more.

2.Asset turnover - The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in dollars by assets in dollars. Formula:

Also known as the Asset Turnover Ratio.

Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the number the better. It also indicates pricing strategy: companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover. One general rule of thumb is that the higher a company's asset turnover, the lower the profit margins, since the company is able to sell more products at a cheaper rate.

3. Asset Allocation How a portfolio is divided between different types of assets and securities. The three main asset classes are stocks, bonds and cash

4. Fixed-income Fund A mutual fund invested primarily in bonds. Although the income received and generated by the Fund may not be fixed, bonds are traditionally referred to as 'fixedincome securities'.

5. Index Fund A mutual fund that aims to replicate a stock market index in its portfolio so that its performance mirrors that of the index. Index Funds are also known as 'tracker' or 'passively-managed' funds

6. Portfolio The collection of investments held by an individual, a fund or an institution.


otherwise known as fixed-interest securities, bonds are basically IOUs which are issued by governments, financial institutions and companies. Generally, the issuer undertakes to pay

investors a fixed rate of interest for a fixed number of years (e.g. 7% for 5 years). The fact that the interest rate is fixed makes bonds attractive because their return is so predictable. Bonds are traded in open markets, in the same way as shares.

a lump sum of money. Usually refers to the amount you invest in a fund at the outset e.g. your original capital.

the value of a company as measured by the total stockmarket price of its issued and outstanding shares. This is calculated by multiplying the number of shares by the current market price of a share. It is also widely used as a definition of company size - hence, big corporations are usually referred to as large cap stocks. f a corporation's total stock value is over $5 or $10 billion, it's usually referred to as large-cap; mid-caps' stock totals spread between $1 billion and just under $5 or $10 billion, depending on who you talk to; small-caps have somewhere between $250 million and $1 billion in stock


an agreement to buy or sell at a specific price at a specific date in the future. There are basically two kinds of option: a call option gives its buyer the right to buy a specified number of shares at a particular price before a specified date. The opposite of a call option is a put option, which gives the buyer the right to sell a specific number of shares at a particular price within a specified time period. In practice, call and put options are rarely exercised; instead, investors buy and sell options before their expiration, trading on the rise and fall of premium prices.
11. P/E ratio The P/E is a quick way to look at the valuation of a stock. One way to view it is as how many years it would take for you to recover your investment principle from the earnings a company generates, assuming no change in those earnings. For example, if you were to buy a company for $5 million that had annual net income of $1 million -- a P/E of 5 -- it would take you 5 years to break even on that investment. !!!!Earnings = Net Income

Trailing P/E

This is the most commonly discussed P/E. It is the current stock price divided by the earnings per share (EPS) from the last four reported quarters.

For example, if the company earned $0.37, $0.42, $0.26, and $0.22 in EPS over the last four quarters and the stock price was $17.33, then the P/E would be $17.33 / $1.27 = 13.64.

Current P/E

The least commonly referenced of the three versions of the P/E ratio, this is the stock price divided by the consensus analysts' estimates for earnings in the current fiscal year. These are usually updated as the company reports earnings through the year, but actual company reported earnings are not used to calculate this.
Forward P/E

This is the stock price divided by the consensus expected earnings for the next year, as opposed to the current or trailing year. The same procedure is used to calculate this ratio, but use the estimated earnings for next year, not this year.

The P/E is sometimes referred to as an *Investor Sentiment* indicator. The P/E will move minute by minute as the price changes, as earnings changes usually happen only once a quarter. As the P/E goes up, it shows that current investor sentiment is that the company is worth more, its future prospects are bright, and sellers are only giving up their stock at higher prices. A dropping P/E is an indication that the company is out of favor with investors. A very low P/E implies that investors believe earnings are likely to decline in the future. High growth companies can justify higher P/Es, but P/Es over 30 are difficult to sustain with earnings growth. They are considered speculative. Motley Fool: The P/E ratio shows the market expectation of that stock. David prefers companies with higher P/E ratios since most excellent companies (Starbucks, Walmart, Apple) have or had them. P/E is important because it helps you look at a company's growth. A higher P/E suggests that the public expects the company to grow more in the future than a company with a lower P/E. For example, high-technology companies like Google can have an astronomical P/E of around 70, whereas very established consumables companies like Wal-Mart usually have a lower P/E of around 20.

12. Same-store sales is a business term which refers to the differential in revenue generated by a retail chain's existing outlets over a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year.[1] By

comparing sales data from existing outlets (that is, by excluding new outlets), the comparison is like-to-like, and avoids comparing data that are fundamentally incomparable. This financial and operational metric is expressed as a percentage. Same-store sales are also known as comparable store sales,comps, identical store sales or likestore sales. 13. Book value - Book value is the accounting value of a firm. It has two main uses: 1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated. 2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced. Book value is the value of an asset on the balance sheet minus total depreciation, depletion, or amortization. For an entire company, it is often viewed as total assets minus total liabilities, often stated on a per-share basis. In this case, it is also known as shareholder's equity.

When an asset is purchased, the cost of that asset is recorded or "booked" on the balance sheet. As time passes and the asset is used or consumed, the asset's "carrying value" is reduced by the accounting expenses of depreciation, depletion, and amortization. A truck used to make deliveries has its value reduced via depreciation or a mine's value is reduced via depletion (gold removed, for example). As the asset is used up, it is worth less and less to the company, so its book value declines over time.
Corporate book value and valuation

From the basic rule of accounting, Assets = Liabilities + Equity, the book value of all the assets minus the liabilities is what shareholders have invested in the company. This is called the "Net Asset Value" and is often called the book value of the company. This is one way to value a company, although some consider it to be of little use when looking at tech companies that are heavy on intellectual property and the like, and light on assets such as factories and heavy equipment. So they might go to the next level and refine it to tangible book value, which takes out things like goodwill. Price-to-book value is one metric investors use when investigating a company. It tells you what you are paying for a company's net assets. Stocks trading at a P/B ratio of less than 1 are often considered undervalued, though this depends on the industry. Of course, book value changes all the time as a company acquires or sells assets, and as depreciation is taken into account. Book value won't equate exactly to market value.

And plenty of companies trade below book value, which can make for a compelling investment if the value is really there, if it can be unlocked. Value can be a subjective measure -- especially with the intangible assets -- and the market isn't always rational. Book value once approximated a company's market value, when most assets, such as factories and land, were capital-intensive and appeared on the balance sheet. Today, however, as America's economy has become less industrial and more service-oriented, book value is a less-relevant measure for investors.For example, Much of Microsoft's value stems from assets that don't register significantly on the balance sheet -- its intellectual property, talented employees, strong brand, and phenomenal market share, for example. Also critical are its competitive position and its growth prospects.

14. Capital gain - A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price.