DIVERSIFICATION

Investment Principal #1Portfolio DIVERSIFICATIONWhat is a portfolio?The collection of investments you personally hold.Ownership in a companyA special type of loanSingle investment mixing stocks/bondsHighly-liquid investmentsUsed for savingWhat is diversification?Diversification is owning a collection of investments in order to spread risk and have a safer investment overall.

What is diversification?Diversification is owning a collection of investments in order to spread risk and have a safer investment overall.

Types of markets

Bear Market = slow marketBonds and money markets do well.Bull Market = growing marketStocks do well.

How do I diversify?Know your own styleHow much do you know about investing?Do you like to take risks?ResearchWhat investment options are available to you?Figure out your time horizonHow long do you have to invest before you need your money?PracticeUse Wall Street Survivor and the Virtual Business Sims before its your own hard-earned money on the line!Step 1 Know Your StyleHow much do you know about investing?Beginner, Intermediate or Advanced?

Do you like to take risks?Take the investment risk tolerance quiz.

Step 2 - ResearchLess Risk More RiskStep 3 Time HorizonLong Horizon10+ yearsIntermediate Horizon1-9 yearsShort Horizon