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Asset Allocation |
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A good way to achieve diversification is by dividing your money among mix of investments across the risk categories. Asset allocation allows you to achieve diversification at a level of risk appropriate for you while still giving you the chance to reap the potential rewards of investing in riskier investments |
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Compound Earnings |
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A way your money may grow faster in which you reinvest any earnings you receive from your investment AND your reinvested earnings |
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Diversification |
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The concept of spreading your money among different investment options to reduce your overall risk. The idea is that if one investment option performs poorly, it only affects a small part of your total investments
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Dollar Cost Averaging |
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A practice of investing the same amount of money at regular intervals, regardless of the price of the shares at the time of purchase. If the same amount of money is invested each time, typically more shares are bought when the price is low, and fewer when the price is high. This investment strategy cannot assure a profit or protect against a loss in a declining market |
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Earnings |
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Also known as return. The money you may make with the money you invest
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Inflation Risk |
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The chance that, over time, your money will lose buying power because of an increase in the cost of goods and services
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Investment Risk |
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The chance you take on how much an investment will go up or down in value, especially over short periods of time. It is the chance you may lose part of your investment
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Volatility |
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The fluctuation of the value of an investment over time
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