What Is a Tax-Deferred Savings Plan? A tax-deferred savings plan is an investment account that allows a taxpayer to postpone paying income taxes on the money invested until it is withdrawn, generally after retirement. The best-known such plans are individual retirement accounts (IRAs) and 401(k) plans. Key Takeaways The 401(k) and traditional IRA are two
What Is a Target-Risk Fund? A target-risk fund is a type of investment fund with a portfolio asset allocation that holds a diversified mix of stocks, bonds, and other investments to create a desired risk profile. The fund manager of a target-risk fund is responsible for overseeing all the securities owned within the fund to
What Is a Target-Date Fund? Target-date funds are structured to maximize the investor’s returns by a specific date. Generally, the funds are designed to build gains in the early years by focusing on riskier growth stocks, then they aim to retain those gains by weighting towards safer, more conservative choices as the target date approaches.
What Is a Targeted-Distribution Fund? The term targeted-distribution fund refers to a specialized mutual fund or exchange-traded fund (ETF) that distributes regular payments of income or capital gains to its investors. As suggested by the name, this type of fund focuses on distributions rather than contributions, usually with a specific retirement date in mind. This makes them
What Is a Target Firm? A target firm or target company refers to a company chosen as an attractive merger or acquisition option by a potential acquirer. A takeover attempt can take on many different flavors, depending on the attitude of the target firm toward the acquirer. If management and shareholders favor the transaction, then
What Is a Target Hash? In cryptocurrency mining, a target hash is a numeric value that a hashed block header must be less than or equal to in order for a new block to be awarded to a miner. Block headers identify individual blocks in a blockchain. Cryptocurrency mining refers to the process of gathering cryptocurrency as a
What Is a Target Market? A target market is a group of people that have been identified as the most likely potential customers for a product because of their shared characteristics such as age, income, and lifestyle. Identifying the target market is a key part of the decision-making process when a company designs, packages, and
What Is a Target Rate? Also known as an operating target, a target rate is a key interest rate in an economy that the central bank uses to guide and gauge the effectiveness of its monetary policy. The target rate is an intermediate target that the bank can directly influence by its monetary policy and
What is Target Risk (Insurance)? Target risk assets are classes of assets excluded from coverage under either insurance policies or reinsurance treaties due to the specific risk they pose. A separate insurance policy or reinsurance treaty may cover a target risk asset. Understanding Target Risk (Insurance) When an insurance company underwrites a policy, it agrees to indemnify
What Is a Tariff? Most countries are limited by their natural resources and ability to produce certain goods and services. They trade with other countries to get what their population needs and demands. However, trade isn’t always conducted in an amenable manner between trading partners. Policies, geopolitics, competition, and many other factors can make trading
