What is Off-Balance Sheet Financing? Off-balance sheet financing is a strategy that keeps huge capital expenditures off the balance sheet of the company so as to lower down the debt-to-equity and leverage ratios. When a huge capital expenditure would affect negative debt agreements, this form of balancing is definitely considered. Some of the exampl...

What is Active Management? Active management refers to using a human element, like a single manager, co-managers, or even a team of managers, to actively manage the portfolio of a fund. Active managers depend on forecasts, analytical research, and their personal experience and judgement when making investment decisions on what securities to purchase...

What is Group Cohesion? Cohesion refers to the amount of camaraderie within a group. In a highly cohesive group, the members have a high degree of connection to the other members.  The group shares a collective identity that is accompanied by a moral bond and loyalty to the group. This gives rise to a common sense of purpose and generally results in...

What is Per Stirpes? Per stirpes refers to an approach where the share of a predeceased beneficiary gets transferred to his heirs or grandchildren. Usually, this term is used at the time of making a will of a person. However, sometimes, it can also be related to a persons retirement accounts. How Does Per Stirpes Distribution Work? The term per stir...

What is a Chartered Wealth Manager (CWM)? Chartered Wealth Manager (CWM) is a professional designation awarded by the IBS International Board of Standards and the Global Academy of Finance and Management (GAFM), formally the American Academy of Financial Management (AAFM), to individuals who have a bachelor's degree, have wealth management experienc...

What is the Endowment Effect? The endowment effect is a term used in behavioral research where a person finds something worthy because he or she already owns or possesses it. This results in the individual investing greater effort to avoid losing the possession than they would to acquire it. ...

What is a Shareholder-Sponsored Proposal? A Proposal put forth to all shareholders of a company for the annual proxy voting, sponsored by one of the company's shareholders or a group of the company's shareholders, is called a Shareholder-Sponsored Proposal. The Security and Exchange Commissions (SEC) Rule 14a-8, regulates the rules to monitor and ex...

What is The Kelly Criterion? The Kelly criterion is a formula used in estimating the growth of capital, it also calculates the expected value of wealth over a long period of time. The Kelly criterion was developed in 1956 by John L. Kelly, Jr and since then has been a strategy used in betting to determine the amount individuals should stake. General...

What is a Self-Funded (Self-Insured) Plan? A Self-Insured or Self-Funded plan refers to a situation where the employer takes on the financial risk for its employees with health care benefits. In plain terms, Self-Insured employers fund claims out-of-pocket as they are charged as against a Fully Insured Plan which entails paying a premium that has be...

What is Probate? A probate refers to a lawful procedure in which steps are taken to review the validity and authenticity. It is about the management of the will of a person who has recently died. The jury is responsible for appointing an executor mentioned in the will for following the procedure of assets collection of the expired person, paying off...