Maybe you’re cashing your first paycheck or catching up with your retirement savings. Or you’re planning for college or a big purchase, like a new home. Whatever your situation, the investment basics remain the same.
Use this investing basics guide to help you build and manage your portfolio. The more you know, the more confident you’ll be as you work toward your investment goals. And these tips apply to all levels of knowledge, whether you’re a new investor or just want to sharpen your skills.

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The first step to building your portfolio is determining how much money to invest and where to invest it. You have a variety of options to choose from: stocks, bonds, mutual funds, CDs, money markets, and more.

Set parameters


How much money do you have now? How much will it take to reach your goals?

Think timing


When will you be using the money? The answer determines how liquid (available) your investments should be and how much risk you should take on.

Choose investments


When choosing how to invest, a balanced strategy can help you manage volatility and growth potential. Here are two important concepts to keep in mind:


Asset allocation is the process of spreading your money among a variety of investments, such as stocks, bonds, or short-term investments.


Diversification is choosing a variety of investments within the three major asset types. For example, diversifying your holdings among stocks, bonds, and money markets. Basically, it’s not putting all your eggs in one basket.

Fix as needed

Once you’ve assembled a diversified portfolio that puts your money to work toward your goals, don’t just “set it and forget it.” Keep monitoring and adjusting as necessary on a regular basis. 

Stay on schedule


When you make consistent contributions on a regular schedule, you may save more. You also benefit from dollar cost averaging, which is the practice of buying the same dollar amount of a security at regularly scheduled intervals.

Keep it balanced


As investments go up and down in value, the portfolio balance you originally set up will change over time. Check your balance of stocks, bonds, money markets, and other investments at least once a year. Adjust asset classes as needed to keep overall risk within your comfort zone and performance on track with your goals.


Know the terms

Volatility, yield, dividend reinvestment—investing has a language all its own. Our glossary is here anytime you need a quick definition of an investment term.

All investments are subject to market risk, including the possible loss of principal. Neither asset allocation or diversification can assure a profit or protect against loss in a declining market.

This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice. This material does not provide fiduciary recommendations concerning investments or investment management; it is not individualized to the needs of any specific benefit plan or retirement investor, nor is it directed to any recipient in connection with a specific investment or investment management decision.