Other times, valuation means estimating future worth. For example, fundamental stock analysts estimate the outlook for a company's stock by looking at data such as the stock's price-to-earnings (P/E), price-to-sales, and price-to-book (or net asset value) ratios. In general, a company with a high P/E is considered overvalued, and a company with a low P/E is considered undervalued.

However, as the prices of many rapidly growing Internet stocks are moving skyward, often in the presence of little-or even no-earnings, many analysts are reconsidering the old valuation models and looking more closely at a company's long-term potential to develop its products and expand its markets.

There is a running debate among financial analysts about whether, over the long term, an investor makes out better buying shares in a value fund or in a fund that may buy high-priced stocks with strong growth potential.

The company uses a dual ranking system in its evaluations. For example, Value Line ranks stocks for their safety and timeliness, and mutual funds both for their overall performance and for their risk-adjusted performance.

Variable annuities also provide insurance protection, promising that if you die before you begin to receive income, your beneficiaries will get at least as much as you put into the annuity, even if your underlying investments have lost money. This assurance encourages some people to invest their annuity assets more aggressively in the hopes of realizing greater portfolio growth.

Another appeal of variable annuities is that you can move money among sub accounts without owing income tax on any gains. The downside is that the cost of added insurance protection, and the promise of a stream of income for life, can make owning a variable annuity more expensive than owning comparable mutual funds. In addition, withdrawals before you reach age 59 1/2 can be subject to a 10% early withdrawal penalty.

If you leave your job before becoming fully vested, you forfeit all or part of your employer-paid benefits. If you become entitled to full benefits gradually over several years, this process is called graded vesting. But if your benefits become payable only after a specified number of years of service, and you forfeit all employer-paid benefits if your employment ends before this waiting period is up, the process is called cliff vesting.

The volatility of a stock relative to the overall market is known as its beta, and the volatility triggered by internal factors, regardless of the market, is known as a stock's alpha.

The strategy behind vulture investing is that such troubled securities have the potential to provide a large return eventually, in spite of their current vulnerable position. Most vulture funds are limited partnerships, but some are retail mutual funds that are open to individual investors.