Money & Work
Own assets that compound
Novice
Subdomain
Most investing returns are lost to your own behaviour during cycles. Panic in crashes and greed in bull runs do more damage than fees ever will.
Mean reversion
The tendency for extreme returns, valuations, or performance to drift back toward long term averages over time.
Open
Efficient market hypothesis
The idea that asset prices reflect all available information, so consistently beating the market through analysis or timing is extremely difficult.
Open
Index fund
Fund that tracks a market index. Low fee, no stock-picking.
ETF
Exchange-Traded Fund, index-style fund that trades like a stock.
Expense ratio
Annual % a fund deducts. Lower = better, all else equal.
Asset allocation
Mix of asset classes (stocks/bonds/cash/etc.) in your portfolio.
Diversification
Spreading risk across uncorrelated assets.
Drawdown
Peak-to-trough loss before recovery.
DCA
Dollar-Cost Averaging, investing the same amount on a fixed schedule.
Rebalancing
Periodically returning your portfolio to its target allocation.