There are three things you’ll want to understand about investing before you start putting your money to work this way.
- There’s an important relationship between risk and return.
- Owning a wide variety of investments within your portfolio is a way to try to reduce risk . This is the technique called diversification .
- Investing is for the long term. If you think you need your money within five years, saving might be a smarter choice. That’s because investment markets go up and down, and you can’t be sure how they’ll be performing at any specific time.
Of course, you’ll learn more about investing as you do more of it. But these are the basics.
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