Investment FAQ

An investment is an asset or item that is purchased with the expectation of generating income or increasing in value over time.

Investing is important to grow your wealth and to generate income over time. Investing can help you reach your financial goals, such as buying a house, paying for your children’s education, or achieving financial independence.

The different types of investments include stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate, and alternative investments such as commodities and cryptocurrencies.

A stock is a type of investment that represents ownership in a company. When you purchase a stock, you are buying a share of ownership in the company.

A bond is a type of investment that represents a loan to a company or government. When you purchase a bond, you are essentially lending money to the issuer, who promises to pay you back with interest.

A mutual fund is a type of investment that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Real estate investing involves purchasing and owning property with the goal of generating income or capital appreciation.

Alternative investments are non-traditional investments that do not fall into the categories of stocks, bonds, or real estate. Examples of alternative investments include commodities, hedge funds, and cryptocurrencies.

Diversification is the practice of spreading your investments across different asset classes and securities to reduce the risk of loss.

Asset allocation is the process of dividing your investments among different asset classes based on your investment goals, risk tolerance, and time horizon.

Risk tolerance is the level of risk that an individual is comfortable taking with their investments. It is determined by factors such as age, income, investment goals, and personal financial situation.