Investing involves putting capital (usually money) into a company, security or other asset with the expectation of generating returns. Historically, investing—particularly in the stock market—has proven one of the best ways to build wealth and save for retirement.
Investing is the act of allocating capital into an asset that you hope will turn a profit. Your total collection of assets makes up your portfolio.
You can invest in several types of assets based on your risk tolerance and preferences. Common asset classes include:
Investing requires a tradeoff between risk and return. As a rule, riskier investments have higher return potential, and vice versa. (Though nothing is guaranteed.)
The risk-return tradeoff varies between asset classes. Generally, cash and equivalents are considered the safest, followed by bonds, then stocks, then more advanced investments like commodities and real estate.
Risk and return also varies between individual securities. For instance, stocks are usually riskier than bonds. But penny stocks (cheap, relatively illiquid equities) are often riskier than blue-chip stocks issued by large, stable companies.
Before investing, it’s crucial to know your:
These factors can influence your investment strategy. Younger investors can often handle more risk than those closer to retirement. But if volatility makes you nervous, you may prefer a more conservative portfolio.
Every investor has their own preferences and needs. But generally, you can divide investors into two categories: active or passive.
Investing is one of the best ways to grow your wealth and save for retirement. With a well-diversified portfolio, you can build financial security thanks to price appreciation, dividend payouts and the magic of compound growth.
If you’re ready to start investing, Q.ai makes it easy. Instead of taking the DIY approach and getting your hands dirty, our robo-advisor can help you get started with a brief survey to assess your needs. Then, we’ll help build the perfect portfolio to suit your situation—all while minimizing your tax bill and maximizing your earnings potential.
Best of all, you can start with just $100 and no fees, ever.
Q.ai is the trade name of Quantalytics Holdings, LLC. Q.ai, LLC is a wholly-owned subsidiary of Quantalytics Holdings, LLC ("Quantalytics"). Quantalytics offers automated financial advice tools through Quantalytics Investment Advisors, LLC ("QAI"), an SEC-registered investment advisor. QIA’s investment advisory services are ONLY available only to residents of the United States. Disclosures concerning QIA’s investment advisory services are available on its Form ADV filed with the SEC. The content in this newsletter is for informational purposes only and does not constitute a comprehensive description of Q.ai's investment advisory services.