A common trust fund or mutual fund that maintains a balanced portfolio, generally 50% bonds or preferred stocks and 50% common stocks, but this percentage can and does vary.

Balance Sheet

The firm's financial statement that provides a picture of its assets, debts, and net worth at a specific point in time.

Basis Point

A unit of measurement that makes it easy to measure dollar amounts smaller than one percent. One percentage points equals 100 basis points. In other words, an investment that yields 3.5% pays 50 basis points more than one yielding only 3%.

Bear Market

A bear market occurs when there is a lose of value for an extended period of time, typically a year or more. A bear market should not be confused with a market correction, which is a short-lived drop in prices.

Beneficiary

A person chosen by a participant to receive the participant's assets in a qualified retirement plan if the participant dies.

Beta

A measure of a stock's risk relative to the market, usually the Standard & Poor's 500 index. The market's beta is always 1.0; a beta higher than 1.0 indicates that, on average, when the market rises, the stock will rise to a greater extent and when the market falls, the stock will also fall to a greater extent. A beta lower than 1.0 indicates that, on average, the stock will move to a lesser extent than the market. The higher the beta, the greater the risk.

Bid Price

The price a buyer is willing to pay for a security. This price is usually lower than the Ask price.

Big Cap Stocks

The stocks of companies whose market value - the total number of shares outstanding multiplied by their price - is more than $10 billion. Big cap companies are well-established corporations with a long track record of steady earnings growth and reliable dividend payments.

Blue-Chip Stocks

Shares in the nation's biggest and most consistently profitable companies. There's no official list of blue-chip companies.

Bond

An IOU issued by a corporation or a government. Bonds generally pay a specific rate of interest and pay back the original investment after a specified period of time.

Bond Rating

A way of measuring the bond issuer's ability to make good on its IOUs. The major bond rating agencies are Standard & Poor's Corp. and Moody's Inc..

Book Value per Share

The accounting value of a share of common stock. It is determined by dividing the net worth of the company (common stock plus retained earnings) by the number of shares outstanding.

Brokerage Account

Allows participant to self-direct investment choices to individual stocks, bonds and mutual funds.

Brother-Sister Controlled Group

Two tests must be met: (1) five or fewer persons own at least 80% of the stock (voting or value) of two or more corporations and (2) based upon ownership of each stockholder, only to the extent that it is identical in each corporation, the five or fewer persons own more than 50% of the combined voting power or value of the corporations.

Business & Industry Risk

Uncertainty of an investment's return due to a fall-off in business that is firm-related or industry-wide.

Buy & Hold

A long-term investing strategy. Buy-and-hold investors maintain their holdings, ignoring short-term market fluctuations. The opposite of buy-and-hold is market timing: trying to anticipate market trends in order to sell investments before prices fall, and buy again before prices rise.

Bull Market

A bull market is one that gains value for an extended period, often several years. Even in a bull market, however, prices fluctuate from day to day.