Do You Know How to Build an Investment Portfolio?
  • 1
    You can reduce your risk of losing money by diversifying your investments, or mixing together a wide variety of companies and types of financial securities.
  • 2
    Professional investors on Wall Street make most of their money because they are really good at researching how stocks will perform in the future.
  • 3
    An asset class is a scheduled lesson with a financial advisor about what assets are.
  • 4
    Because stocks are riskier than bonds, you probably won't make as much money with stocks.
  • 5
    A single name security is a stock that only has one word, like Apple. Zoom Video Communications for example would not be considered a single name security.
  • 6
    Generally speaking, large cap stocks (>$10bn) are less risky than small cap stops (<$2bn).
  • 7
    Companies that are expected to experience high growth are riskier than established, value companies.
  • 8
    You can only buy bonds directly from companies or governments.
  • 9
    Bonds pay periodic payments, called coupons, which are contractual. If a bond skips out on a coupon payment, it's in default.
  • 10
    Generally speaking, the return on bonds are lower than the return on stocks.
  • 11
    Funds are a combination of investments that are packaged up. When you buy one share of a fund, you are getting exposure to everything that fund is invested in.
  • 12
    Active funds generally perform better than passive funds because there are experienced professionals making decisions.
  • 13
    Every fund uses the S&P 500 as it’s benchmark which they aim to outperform.
  • 14
    Alternative investments (like cryptocurrency) or stock picking are really risky so should be avoided.
  • 15
    Your age and how much you have in savings alone determines how much risk you should take on.