Terms You Need To Know Before You Start Investing

Get ready to learn and be inspired with our new blog post! From info for the new investor to something for the more experienced, we’ve got something for everyone. Read on to get the scoop!


This post focuses on essential terms that are crucial for you to grasp before to embarking on your investment journey.

Investing can be overwhelming, especially if it’s your first time. But with the correct information, you can learn how to make intelligent decisions about where and how much to invest.

Stocks are a share of ownership in a company. They can be bought and sold on the stock market, which is the exchange where stocks are traded. Stocks are considered an equity investment because they represent your share of ownership in a business entity. In other words, you own part of that business. Over time, if the underlying company does well and its stock price goes up, then you’ll make money—the stock’s performance combined with any dividends (payouts made by companies to their shareholders) will grow your wealth as long as you hold onto it for long enough (and don’t sell).

Bonds are a type of investment that involves lending money to an organization or government. They can be considered a loan because when you invest in bonds, you’re essentially loaning the organization money. Unlike stocks, however, bonds do not represent ownership in the company or government from which you’re borrowing funds. Instead, they function more like an IOU: if you purchase $1 million worth of 10-year U.S Treasury Bonds with a 4% coupon and sell them after five years for $1.2 million, then the seller will pay you $200K on top of what they paid initially ($100K). The remaining amount ($100K) goes toward paying off the interest earned over those five years (4%).

Investors buy and sell stocks, bonds, and other securities. The investor can be an individual or an institution (a big company). Investors can be long-term or short-term investors. They can also be active or passive investors. There are many types of professional investors, such as hedge fund managers, mutual fund managers, and private equity firms, that specialize in buying undervalued companies from public markets to improve them and make money when they sell them back into the public market at a higher price than they bought them for.

For beginners, we recommend starting by buying index funds because they’re low-cost (the fees charged by financial institutions) and offer broad diversification across multiple asset classes without having to follow individual stocks/bonds closely (which could cause stress). When looking for good investment options for beginners, check out our top picks: Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX), Vanguard 500 Index Fund Admiral Shares VTIAX), and Schwab S&P 500 Index ETF (SWPPX).

A mutual fund is a type of investment fund that pools money from many investors to purchase securities such as stocks, bonds, or other assets. Mutual funds are managed by professional money managers and are meant to be diversified portfolios with lower risk than if you purchased those securities yourself.

Mutual funds make it easy for people with small amounts of capital (like you) to invest in the equity markets. If you have $10,000 to invest, it would be difficult for an individual investor like yourself to purchase enough stocks or bonds to create a diversified portfolio. With mutual funds, however, they do not require large amounts of capital. Instead, they allow retail investors like you and me access to professional investing without requiring large investments on our part.

Diversification is one of the most important concepts to understand in the investing world. It can help you avoid risk, make better investment decisions, reach your financial goals, and sleep at night.

Diversification refers to creating a portfolio that contains different types of investments so that your money will be protected if one area performs poorly (e.g., stocks). For example, if you invest all of your savings in one stock (for example, Apple), then if Apple has a bad year and goes down in value by 10%, all of your money is tied up in that stock and will go down with it. But if instead, you had invested some of those same dollars into another company (say Microsoft), both companies would have gone down equally in value when Apple went down, but Microsoft would have been able to pick up some more shares as prices fell on all stocks due to their fall from grace—making sure that when things turned around again later on, both companies would benefit from being diversified rather than just one being exposed as vulnerable while another was protected by having diverse holdings

Investment risk measures the chance that an investment will lose value. Investment risk differs from market risk, which measures how much your portfolio’s value can change in reaction to stock market fluctuations; this is sometimes called systematic or undiversifiable risk. It’s also different from credit risk, the possibility that a borrower won’t repay their loan or bond on time and in full; it’s also sometimes called specific or unsystematic risk.

Investment risks can be further categorized into liquidity, interest rate, and inflation risks. Liquidity risk refers to the chance that you will not be able to sell an asset quickly enough if you need cash for some reason (such as an emergency). Interest rate risk relates to whether your investment earns more money than what you need to pay back—that is, whether your interest payments outweigh the interest earned on your investments over time (you may want to read up on compound interest here!). Inflation risk refers to how well any potential growth in purchasing power offsets inflation – i.e., whether your income increases faster than prices go up!

It’s important that investors understand the risks associated with different types of investments, as well as their own risk tolerance level. This includes understanding what types of returns they’re looking for and how long they can wait for those returns.

It’s also important that you have a clear understanding of your investment goals, including:

  • How much money do you need?
  • When will you need the money?
  • Is there a specific purpose for the money?

It’s important to be aware of the risks involved with investing. But at the same time, it’s also important not to let fear keep you from pursuing an investment strategy that could make a positive difference in your life. If you feel confident about your financial situation and are comfortable with taking some risks, don’t let fears of an uncertain future hold you back! However, if this isn’t your first rodeo and you aren’t sure where all this money will come from when it runs out: remember that steady returns over time are what matters. You might want to consider investing in safe assets like bonds or CDs (Certificates of Deposit) instead—especially if they offer higher interest rates than savings accounts do these days!

As the healthcare industry struggles to keep costs down, tech companies are stepping in to help. The future of medicine is in the cloud and data analytics — but that’s not all it’s about. The right combination of tools can make you money while also improving your health and keeping your doctor honest. By learning how these companies work together and what they do with your data, you can find ways to profit from them without sacrificing privacy or control over your treatment options.

  • Healthcare costs are rising and rising fast.
  • The healthcare system is a mess.
  • It’s a business, and it’s also a government responsibility, but it’s also personal—it’s your own body, and you pay the bills with your own money.

Apple and Google are in the business of selling hardware and software. They’re not in the healthcare business.

They will continue to stick to their knitting, which means they don’t want to be your doctor or health insurance company. They want you on their phones. And if their phones will get into your pocket, then they need a good reason for you to stay there—and those reasons are health-related apps, such as Apple’s Health Records or Google Fit.

Your doctor can be a profits machine, too, by selling your data. Your medical records are valuable data. They’re not just about your health; they include all kinds of information about you as a person, including what kind of car you drive or what TV show you watch—information that big tech companies would love to know and use for marketing purposes. So big tech companies pay big bucks to get their hands on this data—and then sell it right back to doctors who need it to help diagnose patients or prescribe treatments.

Big Tech companies will also pay doctors directly for access to the patient’s profile so they can better understand how patients interact with their products.

AWS makes money from the same data it helps you access. This is a huge win for customers and a huge win for Amazon.

The reason is simple: AWS has an enormous market share in the cloud computing space, giving them more information to sell to advertisers and marketers. As your healthcare provider uses AWS to store patient records, that data becomes available for other purposes as well—and the more data they have access to, the better their algorithms get at understanding how patients react based on their inputs. This can lead both parties down an interesting path if they decide not just on what happens inside your body but also outside of it—for example, how often do you buy things after searching for them online? Do these purchases increase each time someone clicks on a certain type of ad? That’s valuable knowledge!

  • Choose a doctor who is willing to work with you:
  • The easiest way to do this is by using the big tech companies’ offerings as a starting point. If your insurance plan comes from Google, then choose one of their providers. If you have an Amazon Prime account, try their services first (that’s where I found mine!). But don’t limit yourself: there are plenty of other options out there that might be better for your needs and situation.
  • Choose a doctor who is willing to share your data:
  • Again, I recommend using big tech company providers as they already have agreements in place with all other major players so it should be easy for them to access whatever information they need when necessary (and vice versa). But again, if there are doctors or practices not included yet then make sure they’re open before signing up!
  • Choose a doctor willing to share his or her data with you!: This may sound silly, but it’s probably the most important step since it could literally make all the difference between making $$$ or $$$$. It basically boils down again into two options: either hire someone else, such as an independent contractor or employee running something like Quora as described above, OR build something yourself like another version

We think we’ve made a case for why you would want to keep your healthcare information in your own hands. But the bottom line is that there are plenty of ways to leverage the data coming from your body and mind while also profiting from it. It may not be easy, but the rewards could be well worth it.

Great question! Investing can be a really exciting and fulfilling journey, but it’s important to remember that diversification is key to managing risk and maximizing returns. By spreading your investments across different assets, industries, and markets, you’re creating a well-rounded portfolio that can weather market fluctuations.

First, consider investing in a mix of assets such as stocks, bonds, and real estate. This will help spread out your risk across different markets and sectors.

Next, think about spreading your investments globally by investing in companies and markets from different countries. This can help reduce your exposure to any one specific market.

Another way to diversify your portfolio is by investing in different industries such as technology, healthcare, and energy. This can help you take advantage of different market trends and opportunities.

Low-cost index funds can also be a cost-effective way to diversify your portfolio and gain broad market exposure.

Finally, don’t forget to review and rebalance your portfolio regularly. This will help you maintain the desired level of diversification over time. Remember, diversification doesn’t guarantee a profit or protect against loss, but it can help manage risk. It’s always a good idea to consult with a financial advisor before making any investment decisions.

Your friend,

Taylor xx

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