Here are some of the key things that come to mind when I hear the financial term “investment”:

• Growth – One of the main goals of investing is to grow your money over time through interest, dividends, or appreciation of the investment’s value.
• Returns – Investments are made with the aim of generating financial returns. Different asset classes and securities have different risk/return profiles.
• Risk – All investments carry some degree of risk, from the high risks of speculative investments like penny stocks to lower risks like government bonds.
• Diversification – Smart investors know not to put all their money into one type of investment. Diversifying helps reduce risk.
• Asset Allocation – Determining what percentage of your investable capital should be in stocks vs. bonds vs. other asset classes based on your goals, timeline and risk tolerance.
• Time Horizon – Investments are often made with longer-term time horizons in mind, like retirement decades away vs. short term savings goals.
• Compounding – Earning returns on your principal as well as previous investment gains, and reinvesting it all. Compounding really grows wealth over time.
• Liquidity – Some investments tie up your capital for years, while others allow easy access to your cash. It depends on your needs.
• Volatility – Stock markets and securities values fluctuate daily, sometimes wildly. Some investments/markets are more volatile.

The goal is to invest capital wisely to ultimately grow your money over time!