Section 5.2: Investment Strategies

Section 5.2 Focus

This section focuses on strategies for mitigating investment risk, the benefits of investing in mutual funds,  the risks of investing in individual stocks, the benefits of investing early, and the level of investment risk tolerance. 

Read

  • Please read these chapters from the course text (The Index Card):
    • Rule #4: Never Buy or Sell Individual Stocks (pages 91 - 110)
    • Rule #5: Buy Inexpensive, Well-Diversified Indexed Mutual Funds and Exchange-Traded Funds (pages 111 - 132)

Watch

The following videos present information about investment strategies.

What the Heck Is a Mutual Fund?

What The Heck Is An Index Fund?

Reading a Mutual Fund Fact Sheet

How Risky Is The Stock Market?

Resources

[Optional] One of the fundamental issues to consider when planning your investment strategy is to understand your level of comfort with risk and the possibility of losing the money you invest. Use the Investment Risk Tolerance Assessment by the University of Missouri to evaluate your investment risk tolerance. This assessment tells you about your tolerance and how you approach investing. There are no right or wrong answers.