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Diversification - this is a very common
investing strategy, and is essentially a way to reduce exposure to
risk in a portfolio. Stock brokers often advise this. It means that
if your stocks in certain industries are not performing as well, you
still have stocks in other industries which are performing.
Dollar Cost Average - an investment
strategy designed to reduce volatility in which securities,
typically mutual funds, are purchased in fixed dollar amounts at
regular intervals, regardless of what direction the market is
moving.
For example if you bought 100 shares at $10 a share and they fell to
$5 a share, and then you bought another 100 shares at $5 a share,
then you would have $200 shares that you paid $7.50 per share on
average.
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