Back-end Load A back-end load is a fee or redemption charge an investor pays when withdrawing money from an investment. In many cases, the fee is reduced over the years of investment, or holding period, and eventually is reduced to zero. A back-end sales charge is also called a contingent deferred sales charge.
Bear Someone who believes or speculates that a particular security or the securities in a market will decline in value is referred to as a bear.
Bear Market A bear market is a market in which a group of securities falls in price or loses value over a period of time. A prolonged bear market may result in a decrease in market prices by 20% or more. A bear market in stocks may be due to investor’s expectations of weak economic trends.
Blue Chip Blue Chip refers to companies that have become well established and reliable over time, demonstrating sound management and quality products and services. Such companies have shown an ability to function throughout both good and bad economic times, usually paying dividends to investors even during lean years.
Bond A bond is essentially a loan made by an investor to a division of the federal or state government, a government agency, or a corporation. The bond is a promissory note to repay the loan in full at the end of a fixed time period. The date on which the principal must be repaid is the called the maturity date, or maturity. In addition, the issuer of the bond, that is, the agency or corporation receiving the loan and issuing the promissory note, agrees to make regular payments of interest at a rate initially stated on the bond. Interest from bonds is taxable based on the type of bond. Corporate bonds are fully taxable, municipal bonds issued by state or local government agencies are free from federal income tax and usually free from taxes of the issuing jurisdiction, and Treasury bonds are subject to federal taxes but not state and local taxes. Bonds are rated according to many factors including cost, degree of risk, and rate of income.
Bull Someone who believes that a particular security or the securities in a market will increase in value is known as a bull.
Bull Market A bull market is a long period of rising prices of securities, usually by 20% or more. Bull markets generally involve heavy trading volume and are marked by a general upward trend in the market, independent of daily fluctuations.