This can lead to incorrect assumptions when employed for analyzing companies in industries with strong seasonal or cyclical sales trends. Annuity A contract between an insurance company and a person that provides for periodic payments to the individual or designated beneficiary in return for an investment. Annuities are typically very poor investments, and Fools generally avoid purchasing them. Insurance companies typically push selling them very hard since they usually have high fees. Appreciation An increase in the price or value of an asset.
Appreciation is one component of total return.
Ask The price at which a prospective seller is willing to sell a security. Asset Anything that has monetary value. Typical personal assets include stocks, real estate, jewelry, art, cars, and bank accounts. Asset allocation Dividing investment dollars among various asset classes, typically among cash investments, bonds, and stocks. A method in which the dividends or other earnings from an investment are used to buy additional shares in the investment vehicle.