Risk capacity is what your situation and needs say about your ability to take risk in your investment portfolio. The younger you are and further you are from needing to…

Risk tolerance is your personal ability to deal with risk in your investment portfolio. How do you feel about risk of loss? How do you feel about large swings in…

Your Portfolio is the combination of all of your investments, across all of your investment accounts. It is everything in your brokerage accounts, 401(k) account(s), IRA, etc. considered as one.

Diversification means not putting all your eggs in one basket. In investment terms spreading your portfolio out across multiple investments helps insulate you against specific risks in a way that…

A sector is part of the economy, or group of business, that operates in a similar fashion. Some examples include Finance, Energy, Technology, and Manufacturing. Investments are often grouped by sector…

Asset Allocation is the mix of investments you own. Your “portfolio” of investments and the specific proportion allocated to different investments should be appropriate to your investing goals. Each investment account…

An exchange traded fund (ETF) is similar to a mutual fund. It is a professionally managed investment fund that invests in stocks, bonds, etc. Unlike mutual funds, exchange traded funds are traded…

A mutual fund is a professionally managed investment fund that invest in stocks, bonds, etc. Investors buy and sell shares in the funds directly.