What are the main types of investments available?
The main types of investments include stocks, bonds, mutual funds and ETFs, real estate, and commodities such as precious metals like gold and oil.
Why is diversification important in investing?
Diversification is important because it helps manage risk by spreading your investments across various asset classes, sectors, and geographic regions, reducing the potential negative impact of any single asset's poor performance.
How can one balance risks and returns in investing?
Balancing risks and returns involves aligning your investment choices with your personal risk tolerance, financial goals, timeline, and comfort level with market volatility. Typically, higher risk can offer higher potential returns, such as stocks, whereas lower-risk investments like bonds tend to provide more steady, but lower, returns.
