Stock Market Glossary letter B

Balanced Funds – Balanced Funds are a type of Mutual Fund that seeks to provide a greater degree of security – and correspondingly less risk – than other kinds of mutual funds. Balanced Funds incorporate Bonds and other debt securities in their portfolios. The bond quotient tends to moderate any sudden decline in the fund’s value caused by a stock market correction, and are favored by mature investors nearing retirement age.

Bear Market – A Bear Market can be described as an extended period of declining or stagnant share prices in which investors have little confidence in the market – in fact, they may be said to be “Bearish” (as opposed to “Bullish”) on the market’s prospects. The longest bear market in American history began with the 1929 stock market crash and lasted through much of the 1930s.

Bull Market – A Bull Market is a name given to a longstanding market trend in which stock prices are rising faster than their historical averages. The so-called “Bulls” (and their negative counterparts, the “Bears”) are the investors who drive the market. The longest sustained bull market was the extended run up in share prices lasting roughly the entire decade of the 1990s and ending around the time of the September 11, 2001 terror attacks.

Bonds – Bonds are debt securities issued by companies, governments or organizations that have specified reimbursement dates and a set rate of interest. Bonds pay out this interest annually through the redemption of “coupons” attached to the bond or accrue the annual interest amount by compounding it. Bonds, especially government bonds, are among the most secure types of investments.

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