Key Investment Concepts

 

1. Introduction

 

Virtually every investor has the same basic goal—to achieve the maximum amount of investment growth at a tolerable level of risk.

Accomplishing that balance means knowing yourself as an investor. What level of risk are you comfortable taking? Are you a conservative investor who does not want to risk losing any or most of your principal?  Are you a moderate investor who wants to protect your assets while increasing the value of your portfolio? Or, are you an aggressive investor who is willing to take calculated risks with the expectation of achieving greater than average returns? 

As your goals and priorities change over time, you may find that you need to modify your approach to investing. For instance, if you take on additional financial responsibilities or expect to retire in the near future, you may find it’s time to shift to a more conservative investment strategy.

Whether you’re a new or more experienced investor, and whether you’re investing in a modest or substantial portfolio, it’s important to understand the key financial principles—risk and reward, the time value of money, diversification, volatility, and other essential concepts—that are the foundation of a sound investment strategy.