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Rally

A rapid rise in stock market prices after a sharp decline.

Random Walk

A hypothesis that states stock markets are efficiently priced and that the history of stocks' price changes cannot be used to predict the future perfomance of stocks. Because future prices aren't predicable their movement is random.

Rate of Return

The performance of a security or portfolio that is measured by changes in market value (gains or losses) and income.

Ratio

The relationship between two statisitics that is used to measure a company's current and past business results.

Real Rate of Return

The rate of return an investor would receive after inflation, usually the CPI, is deducted from gross performance. For example, a gross return of 10% less 3% for inflation would produce a real return of 7%. Real return is important for long-term investors so they make sure they protect the purchasing power of their money.

Real Estate Investment Trust (REIT)

A company organized to pool investors' funds and buy, develop, and sell real estate. REIT mutual funds are the most common form of investment for individuals.

Realizing Gains

The act of selling an asset for more than its cost. Assets have to sold for gains to be realized. Unrealized gains means the assets continue to be held by investors.

Recession

A decline in business activity that is shorter and less severe than a depression.

Recovery

A market or security's return to a prior price level after a decline.

Registered Investment Advisor (RIA)

A financial professional or firm that is registered with the SEC or a state agency. RIA's give financial advice and provide financial services for fees.

Registered Representative

A sales person at a broker/dealer who is licensed to provide transactional sales - purchase and sale of securities. Registered Reps also sell financial products such as mutual funds. Most Registered Reps are paid with commissions.

Relative Value

Using statistical analysis, the comparison of one stock to others in categories using PE ratios, dividends, perfomance and other relative measurements.

Restricted Stock

A stock with sales limitations. For example, when shares can be sold, how many shares can be sold, etc.

Retained Earnings

Earnings that are retained by a company and not distributed as dividends. Retention must be for specified purposes.

Retirement Planning

A planning process helps people accumulate and preserve assets for and during retirement. Effective planning protects standards of living during retirement and financial security late in life.

Reverse Mortgage

Used to increase income during retirement. People receive a payment and accumulate a loan balance that is based on the value of their home. The home is sold and the loan is paid usually upon the death of the surviving spouse.

Risk

In regard to investing, the risk of losing money in an investment or the risk of being wrong in a prediction. There are numerous analytical tools that attempt to measure and predict risk.

Rotation

Moving assets between industry groups to improve performance. For example, selling technology stocks and buying consumer stocks.

Russell 2000 Index

A stock index that tracks the performance of the 2,000 smallest market capitalization companies in the U.S. stock market across a broad spectrum of industries.