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Investing Principles. Personal Finance. Time Horizon. The length of time over which an investment is made or held before it is turned into cash (liquidated). Risk - Reward. Potential returns on investments rise with an increase in risk , as does the potential for loss. Risk Tolerance. - PowerPoint PPT Presentation
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Investing Principles
Personal Finance
Time HorizonO The length of
time over which an investment is made or held before it is turned into cash (liquidated)
Risk - RewardO Potential returns
on investments rise with an increase in risk, as does the potential for loss.
Risk ToleranceO The ability and
willingness to stomach large swings in the value of his or her investments.
Compound InterestO Interest that accrues
on the initial principal and the accumulated interest of a principal deposit, loan or debt.O The more frequently
interest is added to the principal, the faster the principal grows and the higher the compound interest will be.
Pay Yourself FirstO Automatically
route your specified savings contribution from each paycheck at the time it is received. O Best done with
a Direct Deposit!
DiversificationO A risk
management technique that mixes a wide variety of investments within a portfolio.
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