Terminology

Here are some foundational concepts you’ll encounter in our tool:

• Investment Horizon The length of time you plan to hold investments before needing the funds. It could range from trade (less than 1–3 year), short-term (1–3 years), mid-term (3-10 years), to long-term (10+ years), influencing the types of assets suitable for your portfolio.

• Risk Tolerance Your ability and willingness to endure market fluctuations. Risk tolerance is influenced by factors such as financial goals, income stability, and personal comfort with potential losses. High risk tolerance: Aggressive growth strategy. Moderate risk tolerance: Balanced approach. Low risk tolerance: Capital preservation.

• Asset Allocation Framework A strategic approach to dividing your portfolio across various asset classes (e.g., stocks, bonds, real estate, cash). This framework balances risk and return by ensuring that no single investment dominates your portfolio.

• Diversification Diversification spreads investments across different industries, regions, and asset types to reduce risk. The goal is to mitigate the impact of poor performance in one area by offsetting it with stronger performance elsewhere. Diversify Across Asset Classes, Geographical, Sector, Currency, Commodity, etc.

• High-Quality Asset Types These are investments with strong fundamentals, such as profitability, stability, and growth potential. Examples include blue-chip stocks, investment-grade bonds, and properties in prime locations. High-quality assets are the backbone of a resilient portfolio.

By mastering these concepts, you’ll gain the confidence to build and refine a portfolio aligned with your goals and risk profile.

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