Plum

AAA

DEFINITION of 'Plum'

A choice investment, or one that has outperformed other comparable investments. While there are no specific quantitative criteria to define a plum, it should have outperformed over a reasonable period of time without being perceived as being unduly risky.

INVESTOPEDIA EXPLAINS 'Plum'

An asset class may be a plum investment in one period and a lemon (the antithesis of a plum) in another. For example, large-cap technology stocks were plum investments in the 1990s, but turned out to be lemons in the first decade of the new Millennium, when US Treasury bonds were among the plums.


In general, stocks that have posted consistent returns for many years would qualify as plum investments. A well diversified portfolio of blue-chips would generally contain a number of plums, but may also contain a few lemons - stocks that are chronic underperformers with poor or negative rates of return.

RELATED TERMS
  1. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  2. Blue Chip

    A nationally recognized, well-established and financially sound ...
  3. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  4. Lemon

    A very disappointing investment. A lemon is an investment in ...
  5. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  6. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
Related Articles
  1. Used Car Shopping: How To Avoid A Lemon
    Home & Auto

    Used Car Shopping: How To Avoid A Lemon

  2. Investing In Foreclosures Not A Get-Rich-Quick ...
    Home & Auto

    Investing In Foreclosures Not A Get-Rich-Quick ...

  3. Is Your Portfolio Overweight?
    Fundamental Analysis

    Is Your Portfolio Overweight?

  4. 4 Steps To Creating A Better Investment ...
    Active Trading

    4 Steps To Creating A Better Investment ...

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center