11.1 Basic Investing Concepts

The use of long-term savings to earn a financial return.

• Saving

• Investing

• Inflation

• Diversification

A collection of investments.

• Portfolio

• Diversification

• Inflation

• Investing

The spreading of risk among many difference types of investment to reduce overall risk.

• Investing Risk

• Diversification

• Rule of 72

• Permanent

A rise in the general level of prices

• Interest

• Principal

• Inflation

• Risk

It is important to have 3 to 6 months worth of expenses in liquid savings.

• True

• False

The rule of 72 is a technique for estimating the number of ears required to triple your money at a given rate of return.

• True

• False

It is a good idea to have a diversified investment portfolio.

• True

• False

Saving vs. Investing: It is meant for short-term goals

• Saving

• Investing

Saving vs. Investing: It involves assets like stocks and bonds.

• Saving

• Investing

Saving vs. Investing: Your account will be impacted by the market,

• Saving

• Investing