What Is an Investment Company? An investment company is a corporation or trust engaged in the business of investing the pooled capital of investors in financial securities. This is most often done either through a closed-end fund or an open-end fund (also referred to as a mutual fund). In the U.S., most investment companies are
What Is an Investment Consultant? An investment consultant is a financial professional who provides investors with investment products, advice, and/or planning. Investment consultants do in-depth work on formulating investment strategies for clients, helping them fulfill their needs and reach their financial goals. Many financial advisors and financial planners would be considered investment consultants. Investment consultants have experience
What Is an Investment Farm? The term investment farm refers to an agricultural business operation that is purchased and operated for financial gain. The intention of investing in a farm may be to generate a profit or to create a tax deduction for the owner. Investment farms are owned by institutional investors who generally don’t
What Is an Investment Fund An investment fund is a supply of capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares. An investment fund provides a broader selection of investment opportunities, greater management expertise, and lower investment fees than investors might be able
What Is Investment Grade? An investment grade is a rating that signifies a municipal or corporate bond presents a relatively low risk of default. Bond rating firms like Standard & Poor’s and Moody’s use different designations, consisting of the upper- and lower-case letters “A” and “B,” to identify a bond’s credit quality rating. “AAA” and
What Are Investment Ideas? Investment ideas are specific views, plans, or insights on ways to invest money effectively. Investment ideas typically involve the expertise and advice of an investment advisor who recommends different investments based on individual circumstances. Professional portfolio managers also build targeted investment portfolios around investment strategies and ideas that target a specific
What Is Investment Income? Investment income is money received in interest payments, dividends, capital gains realized with the sale of stock or other assets, and any profit made through another investment type. Additionally, interest earned on bank accounts, dividends received from stock owned by mutual fund holdings, and the profits on the sale of gold
What Is the Investment Income Ratio? The investment income ratio is the ratio of an insurance company’s net investment income to its earned premiums. The investment income ratio compares the income that an insurance company brings in from its investment activities rather than its operations. It is used to determine the profitability of an insurance
What Is Intestate? Intestate refers to dying without a legal will. When a person dies intestate, deciding how their assets will be distributed becomes the responsibility of a state probate court. An intestate estate can also be one in which the will presented to the court was deemed to be invalid. Key Takeaways When a
What Is “in the Money” (ITM)? The phrase in the money (ITM) refers to an option that possesses intrinsic value. An option that’s in the money is an option that presents a profit opportunity due to the relationship between the strike price and the prevailing market price of the underlying asset. An in-the-money call option
