← All Glossary R-Squared A statistical measure from 0 to 100 indicating the percentage of a portfolio's or fund's movements explained by movements in a benchmark index. Real Estate Investment Trust (REIT) A company owning, operating, or financing income-producing real estate, required to distribute 90%+ of taxable income as dividends to shareholders. Real Return An investment's return after adjusting for inflation, reflecting the true increase in purchasing power over time. Rebalancing The periodic adjustment of a portfolio selling overperforming assets and buying underperforming ones to maintain a target asset allocation. Recession A significant decline in economic activity lasting months or longer, typically defined by two consecutive quarters of negative GDP growth. Reinvestment Using dividends, interest, or capital gains to purchase additional shares of an investment rather than taking cash, accelerating compound growth. Resistance Level A price level on a chart where selling pressure historically exceeds buying pressure, preventing the price from rising further. Retirement The stage of life when one stops full-time work, relying on savings, investments, Social Security, and pensions to fund living expenses. Return on Equity (ROE) A profitability ratio measuring net income divided by shareholders' equity, indicating how efficiently a company generates profit from investor capital. Revenue The total income a company generates from its normal business operations, including sales of goods and services — the top line before deducting expenses. Reverse Stock Split A corporate action reducing the number of outstanding shares while increasing the share price proportionally, often used to meet exchange minimum price listing requirements. Rho An options Greek measuring the sensitivity of an option's price to a 1% change in the risk-free interest rate. Risk The possibility of losing some or all of an original investment, quantified in finance as the standard deviation of returns or probability of loss. Risk Parity A portfolio allocation strategy balancing risk contributions across asset classes, typically using leverage to equalize volatility exposure. Risk Tolerance An investor's ability and willingness to endure market volatility and potential losses, guiding appropriate asset allocation and investment choices. Risk-Free Rate The theoretical return on an investment with zero risk, typically represented by short-term US Treasury bills as the safest available asset. RMD (Required Minimum Distribution) The minimum amount the IRS requires you to withdraw annually from traditional IRAs and 401(k)s starting at age 73, subject to ordinary income tax. Robo-Adviser An automated digital investment platform that builds and manages a diversified portfolio using algorithms, typically offering lower fees and lower minimums than human advisors. ROI (Return on Investment) A performance measure evaluating the profitability of an investment, calculated as net profit divided by the initial cost, expressed as a percentage. Roth 401(k) An employer-sponsored retirement account funded with after-tax dollars, offering tax-free qualified withdrawals in retirement but no upfront tax deduction. Roth IRA An individual retirement account funded with after-tax dollars, allowing tax-free growth and tax-free qualified withdrawals in retirement without RMDs. RSI (Relative Strength Index) A momentum oscillator measuring the speed and magnitude of recent price changes on a 0-100 scale, with readings above 70 overbought and below 30 oversold.
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