Investment Concepts

Inflation
Inflation is an increase in the volume of money and credite relative to available good and services, resulting in continuing rise in the gerenal price level. Over time, inflation reduces the value and purchasing power of money.

Risk Versus Reward
Generally, the greater the amount of risk assumed by an investor is, the greater the potential reqards are. Before you make any investment decisions, you should know your risk tolerance. Factors such as age, income and years unit retirement, should be considered before making any investment decision.

Market Fluctuations
Upswings or downturns in market activity impact the value of investment instruments or accounts. As a result, investments may be worth more or less than their original cost when ultimately redeemed.

Asset Allocation
Asset allocation is the process of developing a diversified portfolio by mixing different asset classes - such as stocks, bonds and cash equivalents - in varying proportions to help reduce risk and maximize potential returns.

Diversification
An investment portfolio that contains a number of different types of investments tends to have a lower level of risk than a portfolio with more similar types of investments. There is no assurance that a diversified portfolio will achieve a greater return than a non-diversified portfolio.

Dollar-Cost Averaging
Dollar cost averaging advocates the investment of a constant dollar amount, regardless of the price of the investment. Over a period of time, thsi generally results in a lower purchase price per investment than if the total purchase was made a t on time.

Compounding
Compounding takes plase when the returns (such as interest, dividends and capital gains) on investments start earning returns of their own.

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