Glossary
Plain explanations of the terms you meet in BullBenchmark and in investing generally.
- Benchmark
- The yardstick you measure your portfolio against. Usually an index such as the S&P 500. A fair benchmark answers one question: would your money have done better in a simple index fund?
- S&P 500
- An index of roughly 500 large American companies, weighted by size. When people say "the market", this is usually what they mean. In BullBenchmark it is one of the two lines your portfolio is compared against.
- QQQ
- An ETF that tracks the Nasdaq-100: the hundred largest non-financial companies on the Nasdaq exchange. In practice it behaves like a concentrated bet on American big tech. The honest mirror if your portfolio leans heavily into technology.
- ETF (Exchange Traded Fund)
- A fund that trades on the stock exchange like a single share. One purchase can give you hundreds or thousands of underlying companies, which is why ETFs are the usual building block for long-term portfolios.
- Cost basis
- What a holding originally cost you, including the effect of buying at different prices over time. BullBenchmark uses the average cost method: total amount invested divided by the number of shares. Your profit is always measured against this base.
- Dividend
- A cash payment a company or fund makes to its shareholders, usually quarterly, semi-annually or annually. BullBenchmark shows both what you have received (from your broker statements) and what your current holdings are expected to pay.
- Ex-dividend date
- The cut-off for a dividend. Own the share before this date and the payment is yours, even if you sell on the day itself. Buy on or after it and the dividend goes to the seller.
- Withholding tax
- Tax a country deducts from dividends before the money reaches you. American dividends typically arrive 15 percent lighter for European investors. BullBenchmark reads the net amounts from your statements, so you see what you actually received.
- Time-weighted return (TWR)
- Your investment performance with the timing of your deposits stripped out. This is the number that can fairly be compared with an index, and the method professional funds report.
- Money-weighted return (MWR)
- Your personal outcome, including the effect of when you added or withdrew money. The gap between your MWR and TWR is roughly the price, or profit, of your timing.
- ISIN
- The international identification number of a security, such as US0378331005 for Apple. Broker exports use ISINs to identify exactly what you traded, which is how BullBenchmark matches your positions to market data.
- FX (foreign exchange) rate
- The exchange rate between two currencies. If you buy American shares with euros, part of your result comes from the shares and part from the dollar. BullBenchmark converts everything at the historical rate of each transaction day, so your numbers stay honest.
- DRIP (dividend reinvestment)
- Automatically using dividend payments to buy more shares. It is the quiet engine of compounding: the payments themselves start earning payments.
- Realized and unrealized gains
- Unrealized gains exist on paper while you still hold a position. Realized gains are locked in when you sell. Both, plus dividends and minus fees, make up your true result.