RRD - Module Review

Risk, Return, and Diversification Module Review

Here are some of the major points you need to know from this unit.

• Saving is a passive activity that focuses on safety.
• Start saving in an emergency fund until you have 3 to 6 months in expenses saved.
• Make saving 10% of your take-home pay your goal.
• Investing is a proactive way to make your money grow.
• Risk and return are directly related.
• Diversification can mitigate risk.
• Different investments are a better fit for different time frames.
• Diversification is accomplished through asset allocation.
• Personal asset allocation is related to your risk tolerance, your investment timeline, and your stage in life.

Review

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