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Investing Principles

Investing Principles. Personal Finance. Time Horizon. The length of time over which an investment is made or held before it is turned into cash (liquidated). Risk - Reward. Potential returns on investments rise with an increase in risk , as does the potential for loss. Risk Tolerance.

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Investing Principles

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  1. Investing Principles Personal Finance

  2. Time Horizon • The length of time over which an investment is made or held before it is turned into cash (liquidated)

  3. Risk - Reward • Potential returns on investments rise with an increase in risk, as does the potential for loss.

  4. Risk Tolerance • The ability and willingness to stomach large swings in the value of his or her investments.

  5. Compound Interest • Interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt. • The more frequently interest is added to the principal, the faster the principal grows and the higher the compound interest will be.

  6. Pay Yourself First • Automatically route your specified savings contribution from each paycheck at the time it is received. • Best done with a Direct Deposit!

  7. Diversification • A risk management technique that mixes a wide variety of investments within a portfolio.

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