What Is a Dedicated Portfolio? A dedicated portfolio is an investment portfolio where the cash flows are designed to match the anticipated liabilities. Dedicated portfolios are usually passively managed and are composed of stable, investment-grade fixed-income assets. Understanding Dedicated Portfolio Dedicated portfolios were promoted by financial researcher Martin L. Leibowitz, who wrote extensively about the
What Is a Dedicated Short Bias? Dedicated short bias is a hedge fund strategy that maintains a net short exposure to the market through a combination of short and long positions. A dedicated short bias investment strategy attempts to capture profits when the market declines by holding investments that are overall positioned to benefit when
DEFINITION of Dedication Strategy Dedication strategy is an asset management method by which the anticipated returns on an investment portfolio are matched with estimated future liabilities. A dedication strategy is frequently used in pension funds and insurance company portfolios to ensure that future liabilities can be met. Dedication strategy is also called portfolio dedication, cash
What Is a Deductible? For tax purposes, a deductible is an expense that an individual taxpayer or a business can subtract from adjusted gross income while completing a tax form. The deductible expense reduces taxable income and, therefore, the amount of income taxes owed. U.S. individual taxpayers may either use the standard deduction or fill out
What Is a Debt Bomb? A debt bomb is a situation occurring when a major financial institution, such as a multinational bank, defaults on its obligations which, in turn, causes disruption not only in the financial system of the institution’s home country but also in the global financial system as a whole. Key Takeaways A
What Is a Debt Buyer? A debt buyer is a company that purchases debt from creditors at a discount. Debt buyers, such as collection agencies or a private debt collector, buy delinquent or charged-off debt at a fraction of the debt’s face value. The debt buyer then collects on the debt either on its own
What Is the Debt Ceiling? The debt ceiling is the maximum amount of money that the United States can borrow cumulatively by issuing bonds. The debt ceiling was created under the Second Liberty Bond Act of 1917 and is also known as the debt limit or statutory debt limit. If U.S. government national debt levels bump
What Is a Debt Collector? A debt collector is a company or agency that is in the business of recovering money owed on delinquent accounts. Many debt collectors are hired by companies to which money is owed by debtors, operating for a fee or for a percentage of the total amount collected. Some debt collectors
Consolidating three credit cards with an average interest rate of 22.99% Loan Details Credit Cards (3) Consolidation Loan Principal $20,000 $20,000 Interest % 22.99% 11% Payments $1,047.37 $932.16 Term 24 months 24 months Bills Paid/Month 3 1 Total Interest $5,136.88 $2,371.84 Risks of Debt Consolidation Debt consolidation can provide several financial advantages, but it also
What Is Debt Deflation? Debt deflation is an economic theory suggesting that a general downturn in the economy can occur when prices fall and the value of currency rises, causing a climb in the real value of debt. The theory originated with 20th century economist Irving Fisher. The essence of debt deflation is that when
