The glossary.
The terms this industry hides behind, defined the way we would explain them across the table. Ask us about any of them — the conversation is the point.
Plain-English definitions.
The terms that come up most often in our conversations, defined without jargon. Definitions are general and educational; they are not advice, and rules and thresholds change.
Accredited investor
An investor who meets SEC income or net-worth thresholds and may therefore participate in certain private offerings. Generally, net worth above $1 million excluding a primary residence, or income above $200,000 individually ($300,000 jointly) in each of the last two years.
Qualified purchaser
A higher standard than accredited investor, generally requiring at least $5 million in investments, which opens access to a further set of private funds.
Alternative investments
Asset classes outside traditional public stocks and bonds: private equity, private credit, hedge funds, private real estate, real assets. They are speculative and often illiquid, can employ leverage, involve higher fees and long holding periods, can lose their entire value, and are available only to investors who meet regulatory requirements.
Endowment model
An institutional allocation approach that pairs public markets with meaningful exposure to private and hedged strategies, seeking resilience across a wider range of market conditions.
Mean-variance optimization
A data-driven construction method that seeks the highest expected return for each unit of risk taken, evaluating each holding by its effect on the whole portfolio rather than in isolation.
Objectives, guidelines & risk parameters
The written terms, documented in your advisory agreement and related client-profile records, that govern how the portfolio is run: objectives, risk range, allocation targets, and the rules for rebalancing. They are what make discipline auditable rather than aspirational.
Separately managed account (SMA)
An account holding individual securities directly rather than fund shares, so gains and losses can be managed lot by lot — useful for tax-aware management.
Asset location
Deciding which account type holds which asset — tax-inefficient holdings in tax-advantaged accounts, tax-efficient holdings in taxable accounts — to reduce the tax drag on the same allocation.
Tax-loss harvesting
Selling a holding at a loss to offset realized gains elsewhere, then maintaining exposure within the wash-sale rules. Done as a year-round discipline rather than a December scramble.
Exchange fund
A vehicle that lets an investor contribute a concentrated, low-basis stock position into a diversified pool in exchange for an interest in that pool, deferring the capital-gains tax an outright sale would trigger. Multi-year holding requirements apply; limited to qualified investors.
10b5-1 plan
A pre-arranged, written schedule for selling company stock that, when adopted properly during an open window, can permit an insider to sell through subsequent blackout periods.
QSBS
Qualified small business stock. Shares that, if strict requirements including a holding period are met, may qualify for a federal capital-gains exclusion on a sale. Eligibility is a tax determination for your CPA and counsel.
Qualified Opportunity Zone fund
A fund investing in designated zones, through which certain realized gains may be deferred and potentially reduced if reinvested and held for a required period. An alternative investment, with the associated risks.
Donor-advised fund
A charitable account where a donor contributes assets, takes the available deduction in the contribution year, and recommends grants to charities over time — useful for concentrating several years of giving into one high-income year.
Irrevocable trust
A trust whose terms generally cannot be changed once established, designed to move assets — and their future appreciation — out of a taxable estate and help protect them for heirs. Drafted by your estate attorney.
Fiduciary
A standard requiring an adviser to act in the client’s interest. All Source acts in a fiduciary capacity in the advice it provides.