What are the basics of investing?

What are the basics of investing?

Investing involves allocating resources, usually money, to generate income or profit. Key concepts include stocks, bonds, and diversification.

What is the difference between stocks and bonds?

Stocks represent ownership in a company, while bonds are loans made to a company or government that pay interest over time.

How can I start investing with a small amount of money?

You can start by opening a brokerage account and considering low-cost index funds or ETFs, which allow you to invest in a diversified portfolio.

What is diversification and why is it important?

Diversification is spreading investments across various assets to reduce risk. It helps protect your portfolio from market volatility.

Are there any risks associated with investing?

Yes, investing carries risks such as market risk, credit risk, and liquidity risk. It's important to understand these before investing.