How To Pick Your Investment Style
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Find out what an investing style is and how to figure out which one suits you.
Investopedia explains: Income investing is a term used to describe a style of stock-picking focusing on securities that generate a cash stream - like traditional bonds, dividend-paying stocks and diversified investment structures that basket income-producing equities like mutual funds and ETFs.
Growth investing is a strategy where an investor seeks out companies demonstrating signs of high earnings that are well above the average rate compared to other firms in their industry and within the overall market.
Most investment choices involve a tradeoff between risk and reward. The "Efficient Frontier" is a modern portfolio theory tool that shows investors the best possible return they can expect from their portfolio, given the level of volatility they're willing to accept.
Nash Equilibrium is a key concept of game theory, which helps explain how people and groups approach complex decisions. Named after renowned mathematician John Nash, the idea of Nash Equilibrium has been used in such diverse fields as international relations, psychology and economics. Game theory in general looks at how individuals or groups make choices that will in turn affect the choices of other parties.
Learn about how this number provides a measure of how much systematic risk a firm's equity has compared to the market.
Learn more about the different ways you can calculate your portfolio's average return.
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