Basis point

A unit that is equal 1/100th of 1%, or 0.01%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.

Bear market

A prolonged decline in the prices of stocks, bonds, commodities or any other asset class. A bear market is usually brought on by declining or poor market fundamentals.

Benchmark

A standard against which the performance of a security, fund, or manager can be measured.

Beta

Beta (?) is a measure of the volatility of an investment in relation to a market index or benchmark. A beta of 1.0 indicates that the fund will exhibit volatility similar to the market's. A beta of less than 1.0 indicates less-than-market volatility and a beta of more than 1.0 indicates more-than-market volatility. In essence, beta reflects how sensitive the returns of an investment are to the market's movements.

Bottom-up investing

An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual stocks. In bottom-up investing, therefore, the investor focuses their attention on a specific company rather than on the industry in which that company operates or on the economy as a whole.

Bull market

A sustained rise in the prices of stocks, bonds, commodities or any other asset class. A bull market is usually brought on by improving or positive market fundamentals.

Buy the index

Purchasing an investable index fund which has an investment portfolio constructed to match or track, the components of a market index such as the S&P 500 Index.