A risk management strategy to allocate an investment portfolio to different asset classes that on average yield a higher return by spreading the risk between high, medium and low-risk assets.
glossary
A distribution of a portion of a company’s profits to the shareholders, payable in cash, stock or other property. Profits that are not distributed remain with the company as retained earnings. Start-ups and high-growth companies rarely offer dividends because their profits are reinvested to help sustain higher-than-average growth and expansion. Larger, established companies tend to issue regular dividends to maximize shareholder returns in ways aside from capital growth.