Investing 101 — Not putting all your eggs in one basket, with the math behind it.
Diversification is the closest thing investing has to a free lunch. By spreading money across many investments, one bad outcome cannot sink everything.
Higher potential returns come with higher risk. There is no reliable way to earn high returns with no risk, and anyone promising that is a warning sign.
Volatility: How much an investment's price swings up and down. Higher volatility means bigger, more frequent moves.
Company specific risk can be diversified away by owning many companies. Market wide risk, like a recession, affects nearly everything and cannot be diversified away.
Your time horizon shapes your risk. A long horizon can ride out dips, so it can usually hold more volatile, higher return assets.
15 practice questions with explanations. Free, and no account is needed to start.