Risk
There are many types of risk in finance, but in general it is the probability of actual returns being less than expected returns. Investors should always carefully consider an investment’s objectives, risks, and fees before investing. Although stable value investment options generally seek to preserve investor capital, provide liquidity, and generate a steady, positive return, it is important to recognize that […]
Surrender Charge
Any payment required for terminating an investment contract, typically a guaranteed investment contract, prior to its scheduled maturity date.
Amortization
With respect to a bond, a payment schedule which will gradually discharge a debt in equal installments consisting of principal and interest. With respect to separate account GICs or synthetic GICs, the process of recognizing realized and unrealized market value gains and losses into the book value over a specified period of time via the crediting rate.
Buy and Hold
A stable value investment strategy that refers to a portfolio of assets that are typically purchased and then held to maturity. In this buy and hold strategy, the investment contract associated with such assets typically terminates at the maturity of the assets. (Compare to constant duration and maturing.)
Credit Risk
The risk that an investment will default, i.e., the borrower or guarantor (the bond or investment contract issuer) will not pay principal and interest as scheduled. (See also impaired securities.)
ERISA
See the Employee Retirement Income Security Act of 1974, as amended.
Guaranteed Insurance Account (GIA)
See life insurance directly sold.
Market Value
With respect to an investment (e.g., a bond, stock, or fund share), market value is the cash value that selling such investment at a given price in the open market generates. As prices for investments tend to fluctuate daily, the actual or implied market value of an investment will likewise tend to fluctuate daily. With […]
Ordinary Withdrawals
See book value withdrawals.
