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
- SectorA group of companies in the same part of the economy, such as technology, healthcare, or energy.
- Mutual FundA pooled investment where many people's money is combined and managed together to buy a mix of stocks or bonds.
- ETF (Exchange-Traded Fund)A basket of investments that trades like a single stock, letting you own many holdings at once with one purchase.
- Concentration RiskThe danger of having too much of your money in one investment, sector, or type of asset.
- DiversificationSpreading your money across many different investments so a drop in any single one does less damage.
- Expense RatioThe yearly fee a fund charges, shown as a percentage of your investment, that covers its operating costs.
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Plain-English education — not personalized legal, tax, or investment advice.