Let's Break Down Investing - The Technical Terms

Trading King
@tradingking
9 months ago

1. Resources Allocation: When you invest, you're essentially putting your money into something, like stocks, bonds, real estate, or even a business venture.
2. Expectation of Returns: The goal is to have that money grow over time or generate income.

This growth can come from various sources:
3. Dividends (Stocks): Like getting a slice of the company's profits.
4. Interest (Bonds): Similar to earning rent on the money you lend.

5. Capital Appreciation: This is when the value of your investment increases. It's like buying a painting and selling it at a higher price later.

6. Risk and Reward: Investing always involves some level of risk, as the value of your investments can go up or down. Higher risks are often associated with higher potential rewards.

7.Diversification: This is like not putting all your eggs in one basket. By investing in a variety of assets, you can reduce risk.

8. Time Horizon: Investment can be short-term or long-term. Long-term investments typically have the potential for higher returns, as you’re giving your money more time to grow.

#Investing #Invest #HowToInvest