Investment Strategies and Risk Management

This set of flashcards covers key terms and concepts related to investment strategies, risk management, and market terminology from the lecture.

Risk

The chance of losing part or all of your investment's value.

Risk Tolerance

How much risk you're comfortable taking, influenced by age, time horizon, and personality.

Risk Averse

Preferring certainty over risk, focusing on preserving capital rather than capital appreciation.

Volatility

How quickly prices change, measured by Beta (greater than 1.0 indicates higher volatility than the market).

Diversification

Spreading investments across different sectors and asset classes to reduce risk.

Liquidity

How easily an asset can be converted to cash.

P/E Ratio

Price divided by earnings per share.

Dividend

A share of profits paid to investors.

52-Week Range

The highest and lowest prices of an asset over the past year.

Expense Ratio

A measure of the costs associated with managing a fund, expressed as a percentage of its assets.

Beta

A measure of a stock's volatility in relation to the overall market; a Beta of 1.0 means it moves with the market.