Decoder · How risk works

Risk

The chance your money is worth less when you need it — or worth less, period, for a while. Stock funds swing more and have grown more over long stretches; cash-like holdings barely move and barely grow. Risk is not a personality test. It is mostly about time: money needed next year cannot ride swings; money needed in thirty years has time to recover from them.

For your first $100: Your first $100 should be money you will not need soon. That single fact — time — is what makes the swings survivable.

Diversification, in plain words Asset allocation, in plain words

← Asset allocation · All 50 cards · Return →

See this word inside your order