Investment Glossary
Plain-language definitions for financial and technical terms used on the ACIS platform.
A
Adaptive Strategy
ACIS's AI-powered strategy that adjusts its approach based on market conditions - more defensive in downturns, more aggressive in uptrends.
Alpha
The excess return of an investment compared to a benchmark (like the S&P 500). Positive alpha means outperformance; negative alpha means underperformance.
API
Application Programming Interface. A way for software applications to communicate. ACIS's API lets developers build custom integrations.
Artificial Intelligence
Computer systems that can perform tasks typically requiring human intelligence, like analyzing data and making decisions.
Assets Under Management
The total market value of investments that a firm manages on behalf of clients.
B
Beta
Measures how much a stock moves relative to the overall market. Beta of 1 = moves with market, >1 = more volatile, <1 = less volatile.
D
Dividend Investing
An investment strategy focused on stocks that pay regular dividends, providing steady income in addition to potential price appreciation.
Dividend Yield
The annual dividend payment divided by the stock price, expressed as a percentage. A 3% yield means you receive $3 annually for every $100 invested.
E
Earnings Per Share
A company's profit divided by the number of shares outstanding. Higher EPS generally means the company is more profitable.
EMA
Exponential Moving Average. Similar to SMA but gives more weight to recent prices, making it more responsive to new information.
Enterprise Value
The total value of a company including debt, minus cash. Used to compare companies regardless of their capital structure.
EV/EBITDA
Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization. A valuation metric that compares a company's total value to its operating cash flow.
F
Free Cash Flow
Cash a company generates after accounting for operating expenses and capital investments. Positive FCF means the company can pay dividends, reduce debt, or invest in growth.
G
Growth Investing
An investment strategy focused on companies expected to grow faster than average, often with higher P/E ratios but strong revenue/earnings growth.
L
Large-Cap Stock
Companies with market capitalization over $10 billion. These tend to be well-established, stable companies like Apple, Microsoft, or Johnson & Johnson.
LightGBM
A fast, efficient machine learning algorithm used by ACIS to rank stocks. Known for handling large datasets and producing accurate predictions.
M
MACD
Moving Average Convergence Divergence. A momentum indicator that shows the relationship between two moving averages. Used to identify trend direction and strength.
Machine Learning
A type of AI where computers learn patterns from data to make predictions. ACIS uses ML to analyze thousands of stocks and predict which may outperform.
Market Capitalization
The total market value of a company's shares. Calculated as share price times shares outstanding. Large-cap: $10B+, Mid-cap: $2-10B, Small-cap: under $2B.
Market Regime
The current state of the market: bull (rising), bear (falling), or sideways (flat). Different strategies work better in different regimes.
Mid-Cap Stock
Companies with market capitalization between $2-10 billion. Often growing companies that may offer more growth potential than large-caps with less risk than small-caps.
Momentum
The tendency of a stock to continue moving in its current direction. Stocks that have been rising tend to keep rising (and vice versa) in the short term.
Moving Average
The average price of a stock over a specific time period, updated daily. Helps identify trends by smoothing out short-term fluctuations.
N
Net Asset Value
The total value of a portfolio's assets minus liabilities, divided by shares outstanding. Used to price mutual funds and ETFs.
P
P/B Ratio
Price-to-Book ratio. Compares a stock's market price to its book value (assets minus liabilities). A P/B under 1 may indicate an undervalued stock.
P/E Ratio
Price-to-Earnings ratio. Compares a stock's price to its earnings per share. A lower P/E may indicate the stock is undervalued; a higher P/E may mean investors expect high growth.
Portfolio Drift
When your actual portfolio allocations differ from your target allocations due to market movements. Rebalancing corrects drift.
Portfolio Turnover
How frequently positions are bought and sold in a portfolio. High turnover increases trading costs and may have tax implications.
Position Sizing
Determining how much money to allocate to each stock in a portfolio. Proper sizing manages risk by avoiding over-concentration.
PPO
Proximal Policy Optimization. An advanced reinforcement learning algorithm used by ACIS to optimize portfolio allocations.
Profit and Loss
The gain or loss on an investment. Calculated as current value minus purchase price (unrealized) or sale price minus purchase price (realized).
Q
Qualified Dividends
Dividends taxed at lower capital gains rates (0-20%) rather than ordinary income rates. Requires holding the stock for at least 60 days.
R
Realized Gains
Profits from investments you've actually sold. These are taxable events, unlike unrealized gains.
Rebalancing
Adjusting your portfolio back to target allocations by buying or selling positions. Helps maintain your desired risk level as prices change.
Reinforcement Learning
A type of AI that learns optimal decisions through trial and error. ACIS uses RL to determine ideal portfolio weights.
Return on Assets
Measures how efficiently a company uses its total assets to generate profits. Shows how well management converts investments into earnings.
Return on Equity
Measures how efficiently a company uses shareholder money to generate profits. Higher ROE (e.g., 15%+) generally indicates better management efficiency.
Risk Tolerance
Your ability and willingness to accept investment losses. Conservative = prefer stability; Aggressive = accept volatility for higher potential returns.
RSI
Relative Strength Index. A momentum indicator ranging from 0-100. Above 70 suggests overbought (may fall); below 30 suggests oversold (may rise).
S
SMA
Simple Moving Average. The average price over a specific period (e.g., 50 days). Smooths out price data to identify trends.
Small-Cap Stock
Companies with market capitalization between $300 million and $2 billion. Higher growth potential but also higher risk and volatility.
Surgical Replacement
ACIS's approach of making precise, targeted changes to portfolios rather than wholesale rebuilds. Reduces trading costs and tax impact.
T
Tax-Loss Harvesting
Selling investments at a loss to offset capital gains taxes. The sold position can be replaced with a similar (but not identical) investment.
U
Unrealized Gains
Profits on investments you still hold. Called "unrealized" because you haven't sold yet - the gains only become real when you sell.
V
Value Investing
An investment strategy focused on buying stocks that appear underpriced relative to their fundamentals (like low P/E or P/B ratios).
Volatility
How much a stock's price fluctuates over time. High volatility means larger price swings (more risk); low volatility means steadier prices.
Most Common Terms
P/E Ratio
Stock price divided by earnings
Market Capitalization
Total value of company shares
Dividend Yield
Annual dividend as % of price
Beta
Stock volatility vs. market
Alpha
Returns above/below benchmark
Rebalancing
Adjusting portfolio allocations
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