Join Jane Barratt for an in-depth discussion in this video Building a balanced portfolio, part of Learning to Manage Personal Investments.
- Managing risk is one of the most important jobs…you have when you're investing.…One key way to do this is to spread…your risk among different investments.…By putting your eggs in different baskets,…you are balancing your portfolio,…and lowering your overall risk.…Balancing your portfolio is also a way…of reflecting your own risk tolerance.…As you know, markets go up and down.…But these ups and downs are uneven, and unpredictable.…When one part of the market goes up,…others can go down.…
When stocks go up, bonds can often go down.…Even on the same news, the impact can be different.…And different kinds of investments are just…more volatile than others.…What you're really diversifying against…is nonsystemic risks.…These are things like bad management,…product recalls, drops in commodity prices,…and changes in regulations that…hit individual companies, industries,…and countries differently.…Diversification is the best way to protect yourself…against nonsystemic risk.…
You can do this in three ways:…diversify by asset class, geography, or industry.…
Jane is the founder of GoldBean, an online investing platform that helps first-time and experienced investors alike take their investments into their own hands. In this course, she shares her investment strategies with you. She breaks down the market into its five basic building blocks—cash and equivalents, stocks, bonds, funds, and insurance products—and the different vehicles where you can invest these building blocks. She also covers topics such as the importance of a balanced portfolio, understanding and managing your risk, identifying value in the market, and building your "money muscles" over time. Plus, learn how to calculate the rate of return of a portfolio vs. general market performance. Last, Jane outlines the options for DIY investing, when it makes sense to work with an advisor, and how to avoid costly investment fees.
- Why should you invest?
- Understanding compound interest
- Comparing stocks, bonds, and funds
- Managing risk
- Building a portfolio
- Finding where to invest money
- Working with a financial advisor