investing

Diversifying with ETFs and Beta

This practice can help manage volatility because not all stocks move the same way when the broader market swings. It also prevents a big drop in a single security from inflicting major damage on an account. And perhaps most important, diversification can reduce the kind of bad emotional reactions that happen when accounts swing in value.

Why Are Stocks Called Equities?

Start with the equity in a house. If your home is worth $400,000 and you owe $320,000 on the mortgage, it has $80,000 of equity. The building is the asset and the mortgage is the debt.