Smart investment strategies
Points to know
- When it comes to your investment strategy, building your portfolio the right way is half the battle. Focus on things you can control, like asset allocation and costs.
- For most investors, once your portfolio is set, there are only a few things you need to do to stay on track.
Make sure you're doing these 3 things first
If you've already started investing but aren't sure you're doing it right, check out these tips for becoming a successful investor.
The measure of how much an investment has paid off, also known as return.
Usually refers to common stock, which is an investment that represents part ownership in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits.
A bond represents a loan made to a corporation or government in exchange for regular interest payments. The bond issuer agrees to pay back the loan by a specific date. Bonds can be traded on the secondary market.
The profit you get from investing money. Over time, this profit is based mainly on the amount of risk associated with the investment. So, for example, less-risky investments like certificates of deposit (CDs) or savings accounts generally earn a low rate of return, and higher-risk investments like stocks generally earn a higher rate of return.
The way your account is divided among different asset classes, including stock, bond, and short-term or "cash" investments. Also known as "asset mix."
The degree to which the value of an investment (or an entire market) fluctuates. The greater the volatility, the greater the difference between the investment's (or market's) high and low prices and the faster those fluctuations occur.
The sum total of your investments managed toward a specific goal.
Usually refers to investment risk, which is a measure of how likely it is that you could lose money in an investment. However, there are other types of risk when it comes to investing.
Then add these 4 additional steps
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.
There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.