This is part of my intermittent series on price, one of the most important and commonly encountered considerations in investing and trading. For this post, I’ll be talking about a relatively local concept called “freehold.”
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“Freehold” on securities.
Although it is a term associated with properties, the term “freehold” in securities investing means that the returns, whether on capital and/or income through dividends/distributions, covered the initial amount of the investment. Any excess profits from the securities in question were considered “free”.
The origin of the use of the word in this context was unknown to me, but the best I could guess was probably a mixture of the view of an investment paying itself off and the feeling of freedom to do whatever with the excess returns. It is similar to stock price
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