The purpose of this website is to be a place for learning and discussion. The website and each tutorial topics do not encourage anyone to participate in trading or investment of any kind.
Any information shown in any part of this website do not promise any movement, gains, or profit for any trader or non-trader.

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Author Topic: Your Knowledge Will Affect Your Investments  (Read 99 times)

HuydaySan

  • Guest
on: December 10, 2020, 03:44:51 PM
Your Knowledge Will Affect Your Investments

Knowledge about investing plays an important role in how you invest. Investments like savings accounts and CDs require very little knowledge, especially since your accounts are protected by the FDIC. However, market-based instruments such as stocks and bonds require more knowledge.

Investing in assets that require more knowledge requires developing your understanding of those assets. For example, investing in individual stocks requires a lot of knowledge about the company, industry, product, competitive environment, company finances, etc. Many people do not have the time to invest in this process.

But even if you lack knowledge, there are ways to take advantage of the market. One of the best is an index fund, which contains a collection of stocks. If a single stock performs poorly, it is unlikely to have a significant impact on the index. In effect, you are investing in the performance of dozens, if not hundreds, of stocks, which is more of a bet on the overall performance of the market.



 

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