A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- DiversificationSpreading your money across many different investments so a drop in any single one does less damage.
- SectorA group of companies in the same part of the economy, such as technology, healthcare, or energy.
- Asset AllocationHow you split your money among stocks, bonds, and cash — the biggest driver of risk and growth.
- PortfolioThe full collection of investments you own, such as stocks, bonds, and funds held across your accounts.
- Risk ToleranceHow much investment ups and downs you can handle emotionally and financially without changing your plan.
- CorrelationA measure of how closely two investments move together, which helps you build a diversified mix.
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Plain-English education — not personalized legal, tax, or investment advice.