What Is Tactical Asset Allocation (TAA)? Tactical asset allocation is an active management portfolio strategy that shifts the percentage of assets held in various categories to take advantage of market pricing anomalies or strong market sectors. This strategy allows portfolio managers to create extra value by taking advantage of certain situations in the marketplace. It
What Are Total Annual Fund Operating Expenses? Total annual fund operating expenses are a fund’s costs, such as management and transaction fees and 12b-1 fees, reported as a percentage of the fund’s total assets. Total annual fund operating expenses are required to be disclosed to investors in a fund’s prospectus. They are reported as a
What Is the Taft-Hartley Act? The Taft-Hartley Act is a 1947 U.S. federal law that extended and modified the 1935 Wagner Act. It prohibits certain union practices and requires disclosure of certain financial and political activities by unions. The bill was initially vetoed by President Truman, but Congress overrode the veto. Key Takeaways The Taft-Hartley
What Is Tail Risk? Tail risk is a form of portfolio risk that arises when the possibility that an investment will move more than three standard deviations from the mean is greater than what is shown by a normal distribution. Tail risks include events that have a small probability of occurring and occur at both
What Does “Take a Flier” Mean? The term “take a flier” is a colloquial term that refers to the risk that an investor takes when they knowingly make an investment that may result in a significant loss. Put simply, it is financial slang that denotes the actions that an individual who knowingly engages in risky
Take-home pay is the net amount of income received after the deduction of taxes, benefits, and voluntary contributions from a paycheck. It is the difference resulting from the subtraction of all deductions from gross income. Deductions include federal, state and local income tax, Social Security and Medicare contributions, retirement account contributions, and medical, dental and other insurance
What Is Take or Pay? Take or pay is a provision in a contract stating that a buyer has the obligation of either taking delivery of goods from a seller or paying a specified penalty amount to the seller for not taking them. Take-or-pay provisions benefit both parties by sharing risk, and they benefit society
What Is Take-Out Commitment? Take-out commitment is a written guaranty by a lender to provide permanent financing to replace a short term loan at a specified future date if the project has reached a certain stage. Key Takeaways Take-out commitment is a written guaranty by a lender to provide permanent financing to replace a short
What Is a Take-Out Loan? A take-out loan is a type of long-term financing that replaces short-term interim financing. Such loans are usually mortgages that are collateralized with assets and have fixed payments that are amortizing. Take-out lenders who underwrite these loans are normally large financial conglomerates, such as insurance or investment companies, while banks
What Is a Takeover? A takeover occurs when one company makes a successful bid to assume control of or acquire another. Takeovers can be done by purchasing a majority stake in the target firm. Takeovers are also commonly done through the merger and acquisition process. In a takeover, the company making the bid is the
