May 29, 2018
Understanding the basics is foundational when learning a new skill or pursuing new undertakings. The first step before investing is to equip yourself with the basics of how investing works. It is crucial that you understand how investment returns are generated and how investors gauge and manage risks based on their investment objectives and time horizon.
“No matter what your time horizon or risk tolerance, you should never invest your money in something you do not understand.” - Tracey Bissett
Today, I’m sharing a micro-training on investment basics including the definition of some common investing and saving financial terms. I discuss what investment objectives are as well as the four main asset classes: 1) equities (i.e. stocks), 2) fixed income (i.e. bonds), 3) cash equivalents (i.e. money market instruments) and 4) alternative investments (i.e.: real estate, commodities and cryptocurrencies). I also talk about why it is crucial to know your risk tolerance and how to determine the best investment choice or decision for you.
“Everybody is going to have a unique perspective and something that you’re more comfortable with than someone else. This is why investing is a very personal decision.” - Tracey Bissett
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