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Glossary: b

Bear Investor: Bear investors think investments are going to fall, so they sell their investments in the hope of buying them back at a lower price. A bear market is a period of falling stock prices, over a period of time.

 

Benchmark: A target which investment fund performance can be measured against. A benchmark, usually specified at the start of the investment process; can be a stockmarket index or a stakeholder group.

 

Bid price: The price at which units or shares may be bought or sold.

 

Bid/offer spread: The difference between the buying and selling price of shares and units, largely attributable to the initial charge.

 

Bonds: Loan agreements with a company or government body where there is an arranged repayment to the investor when the loan matures and the investor receives interest throughout the life of the loan. Such bonds can be bought and sold.

 

Bonus issue: Free shares issued to a company’s existing shareholders. No money changes hands and the share price falls pro rata. Also known as a scrip issue.

 

Book value: The amount at which assets and liabilities are held in the accounting records.

 

Bottom-up approach: A procedure of portfolio construction determined primarily by stock selection. Fund managers will assess the quality and future prospects of a stock, analysing factors such as the strength of management, market share, pricing power; which will all determine future earnings growth.

 

Break clauses: Clause in a contract allowing one or both parties to terminate the agreed contract.

 

Brownfield site: A site which has previously been developed and is available for redevelopment. Such sites may be contaminated.

 

Bull Investor: Bull investors believe prices will rise, so they buy securities in the hope of selling them at a higher price than they paid. A bull market is any market in which prices are in an upward trend.

 

Buy-to-let: A type of property which is purchased with a view to renting it out.

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