[uh-kyoo-myuh-ley-shuhn] Pronunciation Key | 1. | act or state of accumulating; state of being accumulated. |
| 2. | that which is accumulated; an accumulated amount, number, or mass. |
| 3. | growth by continuous additions, as of interest to principal. |
Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.
| ac·cu·mu·la·tion
(ə-kyōōm'yə-lā'shən) Pronunciation Key
n.
|
The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2006 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
accumulation
| accumulation | |
noun | |
| 1. | an increase by natural growth or addition [syn: accretion] |
| 2. | several things grouped together or considered as a whole [syn: collection] |
| 3. | the act of accumulating |
| 4. | (finance) profits that are not paid out as dividends but are added to the capital base of the corporation |
Accumulation
1) In the context of individual investing, it is the process of contributing cash to invest in securities over a period of time in order to build a portfolio of desired value. Dividends and capital gains are also reinvested during this process.
2) In institutional investing, it is the action of a large investor buying up many shares of a public company over an extended period of time.
3) In corporate finance, the retention of company profits for reinvestment in business operations, as opposed to the payout of earnings as dividends to shareholders.
Investopedia Commentary
1) When an individual investor is attempting to build up the value of their portfolio, they are said to be accumulating wealth. The reinvestment of profits over the course of the investment time horizon can greatly boost the pace of accumulation through the benefits of compounding.
2) Large investors and financial institutions are limited in their ability to move in and out of securities, since they deal with large numbers of shares which would drive the price of a security up if ordered all at once. In order to completely buy their intended number of shares, institutional investors spread their accumulation of shares over a period of time.
3) Rather than pay dividends out to investors, accumulation of earnings within the corporation boosts the ability for business expansion and growth, hopefully producing extra value for shareholders in the long run.
Related Links
Evaluating Retained Earnings: What Gets Kept Counts
Institutional Investors And Fundamentals: What's The Link?
Keeping An Eye On The Activities Of Insiders And Institutions
See also: Accumulation Plan, Capital Base, Capital Gain, Compounding, Dividend, Elephants, Institutional Investor, Retained Earnings
Also spelled: accumulating, accumulate
accumulation
- The purchase of a particular security throughout a period of time. For example, the accumulation of a substantial quantity of a stock by a portfolio manager may take place over a period of several weeks or months in order to avoid driving up the price of the stock. An individual's accumulation of shares of a mutual fund may occur over a period of many years.
Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company.
Main Entry: ac·cu·mu·la·tion
Function: noun
: increase or growth by addition esp. when continuous or repeated; specifically : an increase in the amount of a fund or property by the continuous addition to it of the income or interest it generates
NOTE: Because they prevent the enjoyment and benefit of wealth, accumulations are deemed contrary to public policy. A provision in a will for an accumulation will be invalidated if found to be unreasonable by the court.
Accumulation
Ac*cu`mu*la"tion\, n. [L. accumulatio; cf. F. accumulation.]1. The act of accumulating, the state of being accumulated, or that which is accumulated; as, an accumulation of earth, of sand, of evils, of wealth, of honors. 2. (Law) The concurrence of several titles to the same proof. Accumulation of energy or power, the storing of energy by means of weights lifted or masses put in motion; electricity stored. An accumulation of degrees (Eng. Univ.), the taking of several together, or at smaller intervals than usual or than is allowed by the rules.
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