Risk and portfolio
Risk and return, diversification, volatility and beta, rebalancing, market declines and common mistakes.
Risk and return
Every investment balances the chance of gain against the chance of loss. As a general rule, the higher the potential return, the greater the risk you must accept to earn it.
Read →Diversification
Diversification means spreading your money across many investments so that no single one can sink your whole portfolio. It is often summed up as not putting all your eggs in one basket.
Read →Volatility and beta
Volatility measures how much a share price swings; beta compares those swings with the market as a whole.
Read →Allocation and rebalancing
Rebalancing means occasionally adjusting your investments back to the mix you originally chose. It keeps your level of risk from drifting over time as different holdings grow at different rates.
Read →Psychology and common mistakes
Some of the biggest mistakes investors make are emotional rather than analytical. Learning to manage fear and greed is as important as understanding any single metric.
Read →Market declines and drawdowns
A bull market is a sustained period of rising prices, and a bear market is a sustained period of falling prices. Markets move through both, and neither lasts forever.
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