Stock Cycle

Stock Cycle

The evolution of a stock's price from an early uptrend to a price high and eventually to a downtrend. The stock cycle is a buy-and-sell cycle that occurs over several years and has four stages: accumulation, markup, distribution, markdown. The stock cycle has expansion and contraction periods, much like the economic cycle. It can be used for portfolio management allocation, allowing for more investment during the accumulation and markup phases and less investment during the distribution and markdown phases.

Distribution Reinvestment

Distribution Reinvestment

A process whereby the distribution from a limited partnership, real estate investment trust (REIT) or other pooled investment is automatically reinvested into common units or shares in a fund, often at a discount to the current market price. Investors can set up distribution reinvestment plans with the partnership itself, or with a broker through which the units are held. Also known as a DRIP, but not to be confused with dividend reinvestment plans (also called DRIPs), which are found in many large-cap stocks and mutual funds. Most distributions are done quarterly, but some may occur on a monthly basis. Investors who participate in these programs also generally have commissions and other fees waived, making it an advantageous and affordable way to grow their investment. Meanwhile, the financial managers have a stable way to grow assets with current investors.