Investments

Investment: the act of giving up something in the

present in order to gain something more in the
future.
Risk: The potential for loss.
Return: Yield made from an investment.
Definitions
Shares: Ownership in a company
Diversification: the act of spreading risk by investing
in other industries or investments
Definitions
Examples of Investments
Stocks
Bonds
Mutual Funds
Commodities
Money Market
Savings Account
How does diversification help lower
overall risk?
Since diversification is the spread of risk, the
performance of an individual industry or investment
will not make as much of a total difference than if
there was no diversification.
Diversification
Pros Cons
Lower overall risk
May lower amount of
overall volatility
Lower overall return
May lower amount of
overall growth