← All Glossary Backdoor Roth IRA A strategy allowing high-income earners to contribute to a Roth IRA indirectly by making a non-deductible traditional IRA contribution and converting it to a Roth. Backtesting The process of applying a trading or investment strategy to historical market data to evaluate its hypothetical performance before deploying it with real capital. Balance Sheet A financial statement summarizing a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of financial health. Barbell Strategy An investment approach that concentrates holdings in short-term and long-term assets while avoiding intermediate maturities, balancing liquidity with yield. Basis Point (bp) One one-hundredth of a percentage point (0.01%), used to precisely describe changes in interest rates, bond yields, and fee structures — 100 basis points equal 1%. Bear Market A market condition where asset prices decline by 20% or more from recent highs, typically accompanied by widespread pessimism and negative investor sentiment. Behavioral Finance A field of study combining psychology and economics to explain how cognitive biases and emotional factors influence investor decisions and market outcomes. Beneficial Owner A person who enjoys the benefits of owning securities even if the shares are held in another name, such as a brokerage firm's nominee, retaining voting and economic rights. Beta A measure of a security's volatility relative to the overall market, where a beta above 1 indicates higher volatility than the market and below 1 indicates lower. Bid-Ask Spread The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask), representing transaction cost. Bitcoin The first decentralized cryptocurrency, created in 2009 by Satoshi Nakamoto, operating on a peer-to-peer network without a central authority or intermediary. Blockchain A distributed ledger technology where transactions are recorded in chronological blocks linked cryptographically, providing transparency, immutability, and decentralization. Blue Chip A large, well-established, financially sound company with a strong reputation and reliable performance, typically a component of major market indices. Bollinger Bands A technical analysis tool consisting of a moving average and two standard deviation bands above and below it, used to identify overbought and oversold conditions. Bond A fixed-income debt security where an investor loans money to an issuer (government or corporation) in exchange for periodic interest payments and principal repayment at maturity. Book Value The value of a company's assets minus its liabilities as recorded on the balance sheet, often used as a baseline valuation metric compared to market value. Broker A licensed financial professional who executes buy and sell orders on behalf of clients in exchange for a commission, subject to suitability obligations under securities laws. BRRRR Method A real estate investment strategy — Buy, Rehab, Rent, Refinance, Repeat — where an investor buys distressed property, renovates it, rents it out, refinances to pull out equity, and repeats. Bucket Strategy A retirement withdrawal approach dividing assets into multiple buckets (cash, bonds, stocks) by time horizon, drawing from each sequentially to manage sequence-of-returns risk. Bull Market A market environment characterized by rising asset prices, typically by 20% or more, driven by investor confidence, economic growth, and optimistic sentiment. Business Development Company (BDC) A publicly traded closed-end fund investing in small and mid-sized private companies, providing capital through debt and equity while offering high dividend yields to investors.
B
21 terms