Investing Basics
Mutual Fund Bullet Tour Page 11Understanding the basic underlying concepts of investing is crucial to your success as an investor. This is true whether you're a do-it-yourself investor or rely on a investment advisor to handle your investments for you.You probably wouldn't even consider driving on a freeway the first time you sat behind the wheel of a car. And you should know that being able to communicate effectively with your doctor results in receiving better care. You should approach investing with the same attitude. The more you know, the better off you will be. There are three primary concepts: - Return
- Risk
- Asset Allocation
To understand these concepts you need a basic understanding of the following: - Compound Return
- The Time Value of Money
- Arithmetic and Geometric Mean
- Standard Deviation
- Correlation
- Beta
You don't need an intimate knowledge of these concepts, but you do need to understand what they are and what they mean to you as an investor.Relevant Content: |
