Category: Terminology

  • Portfolio Allocation

    A portfolio is a basket of investments that can include stocks, bonds, commodities, currencies, cash equivalents, and real estate. Portfolios can be allocated in many ways such as among equity sectors, asset classes, countries, and so on… We focus on maintaining target asset class allocations and sector concentrations based on our measures and opinions of […]

  • Pullback

    A pullback is a short pause or brief reversal in the price. The duration of a pullback is usually only a few consecutive sessions. Pullbacks can provide an entry point to initiate long positions.

  • Business Cycle

    A business cycle is defined as: Expansion: The economy is moving out of recession. Money is cheap to borrow, businesses build up inventories again and consumers start spending. GDP rises, per capita income grows, unemployment declines, and equity markets generally perform well. Peak: The expansion phase eventually peaks. Sharp demand leads the cost of goods […]

  • Economic Expansion

    Can be described as a period of economic prosperity usually accompanied with decreasing unemployment and growth of Gross Domestic Product (GDP). Economists define Expansion as two or more consecutive quarters of Real GDP growth. A key component of the Business Cycle Expansion Peak Contraction Trough

  • Economic Contraction

    Can be described as a period of economic hardship usually accompanied with increasing unemployment and reduction of Gross Domestic Product (GDP). Economists define contraction as two ore more consecutive quarters of Real GDP decline. A key component of the Business Cycle Expansion Peak Contraction Trough

  • The Conference Board Leading Economic Index (LEI)

    A composite economic index tracking key elements of the US economy. Leading Economic Index Factors considered: Average weekly hours, manufacturing Average weekly initial claims for unemployment insurance Manufacturers’ new orders, consumer goods and materials ISM® new orders index Manufacturers’ new orders, nondefense capital goods excl. aircraft Building permits, new private housing units Stock prices, 500 […]

  • Capital Expenditures (CAPEX)

    Capital Expenditures are funds used by a company to purchase and/or upgrade assets such as property, equipment, technology. Items bought with CAPEX funds will appear on a company balance sheet.

  • S&P 500

    The S&P 500 or Standard & Poor’s 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The index is widely regarded as the best gauge of large-cap U.S. equities. Source:

  • Economic Data

    The term economic data is the term used to measure and track components of the economy. Examples include: Consumer Price Index (inflation), Gross Domestic Product (GDP), and Unemployment Rate. The best source for this information is the Federal Reserve Bank of St. Louis. See their data visualization tool here. Source:

  • Inflation

    Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Most commonly used inflation indexes are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI). Components of Inflation: Demand-Pull – When demand for goods and services exceeds […]