Learning some financial terms

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Managed funds

Managed funds or mutual funds are said to be a great way for ordinary people to get involved in the stock market. When you invest your money in a specific fund you are combining your money with other money investors who would not otherwise be able to invest directly in the stock market. These funds come with a fee that pays for the services of the fund manager.

Diversity

This is when you spread your money around to reduce the risk rather than putting too many eggs in a few baskets. At the time of GFC 2006, there was a story of investors who lost their entire life savings when they went under a financial institution. Instead of scattering their money around different assets and different types of investments, these people invested all their money in one company known as diversification.

Instability

Instability means market movement and movement; This also applies to investing in gold and cryptocurrencies.

Experienced investors know that markets can become volatile during periods of uncertainty. Investors need to develop the right mindset at this time because the markets will accept even the most intelligent investor in a roller coaster ride.

Dangerous profile

It has to do with how much risk you are willing to take before you start getting nervous about your investment. It is easy to be an investor in growth funds when the markets are growing but experienced investors know that the stock market is volatile, so you need to invest according to the amount of volatility you will be able to withstand.

Average

The average is the strategy where you regularly buy a small batch of shares in exchange for a single batch. This is possible through internet trading apps. The advantage is that as the stock prices go down, you buy some stocks at a lower price. Find the average amount you paid per share, add the total amount paid per share, and divide that figure by the total number of transactions. This will give you the average amount per share. The average bitcoin can also be used to buy.

Dividends

Companies pay a dividend to shareholders. Dividends come out of the company’s profits. Many investors want to reinvest any money they receive from dividends; Others prefer to take it as income. It depends on whether you invest in an income or long-term capital gain.

Resources

Wealth is a thing that earns income for you. Examples of assets are interest bearing accounts, shares, mutual / managed funds, assets, etc.

Liability

A liability is something that costs you money. If you pay something, it is a liability. Items purchased at HP, credit card or finance company are all liable because they cost you money. Incredible money-managers have some liability because they know that the interest payable on borrowed money is “dead money”, because they are not getting anything clear for their money.

Capital gain

Captain-profits are the value of investing whether they are shares, mutual / managed funds, assets, gold or crypto-currencies.

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