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.
- Sector FundA fund that concentrates on one part of the economy, offering focused exposure with less diversification.
- Asset ClassA group of investments that behave similarly, such as stocks, bonds, cash, or real estate.
- Concentration RiskThe danger of having too much of your money in one investment, sector, or type of asset.
- StockA share of ownership in a company that you can buy and sell, giving you a small stake in its profits and growth.
- PortfolioThe full collection of investments you own, such as stocks, bonds, and funds held across your accounts.
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Plain-English education — not personalized legal, tax, or investment advice.