Investing Basics
Learn about stocks, bonds, mutual funds, and building a diversified investment portfolio for long-term growth.
Start with Budgeting FirstInvestment Fundamentals
Core concepts every investor should understand.
- Stocks represent ownership in companies
- Bonds are loans to governments or corporations
- Mutual funds pool money from many investors
- ETFs trade like stocks but hold diversified portfolios
Risk vs Return
Understanding the relationship between risk and potential rewards.
- Higher potential returns typically come with higher risk
- Diversification can reduce risk without sacrificing returns
- Time horizon affects your risk tolerance
- Never invest money you can't afford to lose
Diversification
Spreading investments to reduce risk and improve returns.
- Don't put all eggs in one basket
- Diversify across asset classes, sectors, and geographies
- Rebalance periodically to maintain target allocation
- Consider your age and risk tolerance
Dollar-Cost Averaging
Investing fixed amounts regularly regardless of market conditions.
- Reduces impact of market volatility
- Removes emotion from investment timing
- Works well with automatic investment plans
- Particularly effective in volatile markets