Diversification is the practice of spreading your investment portfolie across different types of assets, such as stocks ,bonds, and real estate.it helps to reduce overall risk by investment on your portfolie
Risk Tolerance
Risk tolerance is your ability and willigness to accept risk in your investments. it's important to understand your risk tolerance before investing, as it will help you choose investments that allign with your goals and comfort level.
Asset Allocation
Asset allocation refers to the proportion of your portfolio that invested in different types of assets, such as stocks, bonds, and cash . The right asset allocation depends on your investment goals, risk tolerance, and time horizon.
ROI
ROL, or return on investment, is a measure of the profit or loss generated by an investment over a certain period of time. it's calculated by dividing the investment's net profit by its cost.
Mutual Funds
Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds or other securities . They offer a convenient way to invest in a various of assets and managed by professional fund managers.
Index Funds
Index funds are a type of mutual funds that tracks a specific stock markets index , such as the S & P 500 . They offer low fees and diversification across a broad range of stocks.
ETFs
ETFs, or exchange - traded funds , are similar to index funds but trade like individual stocks . They offer the benefits of diversification and low fees the benefits of diversification and low fees but are more flexible and tradable than traditional mutual funds .
Dividends
Dividends are payments made by a company to its shareholders as a portion of the company's profits. They can provide a source of regular income for investors and are often paid by companies worth a stable financial history.
Capital Gains
Capital gains are profits made from selling an investment for more than its original purchase price . They are subject to capital gains taxes and can be short - term or long - term depending on the length of time the investment was held
Volatility
Volatility refers to the degree of variation of an investmwnt's price over time.it's important to understand the volatility of an investment before investing.as hifgh volatility can nmean high risk but also high potential return