Fund

  

A fund, as in a mutual fund, hedge fund, private equity fund, venture capital fund, or rainy day fund.

That's "fund" as a noun. It's a collection of assets designed to be invested to be worth more in the future, in one way or another. But "fund" as a verb is to inject cash into something, also with the goal of making that cash worth more "tomorrow" than it is today.

Fund. Have some fund and fund a fund. Or something like that.

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Finance: What is fund diversification, a...45 Views

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finance a la shmoop. what is fund diversification and why is it important?

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well ever hear the phrase don't put all your eggs in one basket ? yeah if you do

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and there's a pothole, well, this can happen. had she put a few eggs here [woman drives car]

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than another few there and then another few there well breakfast might have been

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saved. well the same thing works for stocks. sorta ,put all your eggs and

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shares of the newly IPO to whatever dot-com and it could be a moonshot. [chart on screen]

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SpaceX IPOs at fifty bucks a share and soars to a thousand dollars a share, but

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well then the Martians kill the visitors and eat their brains and the spacecraft.

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oh well you were rich for at least an hour. that's something right most people [alien on flaming planet]

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don't want to live such a volatile life, especially when it comes to thinking

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about long-term investing and maybe even retirement. when your entire investment

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portfolio is in one stock it can be a wild ride and if you're not a

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professional investor it's likely that you'll get weak and sell at just the [woman types at computer]

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wrong time .so instead of having to worry about timing and picking just the right

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stock most investors buy a basket of stocks which are diverse. like two-thirds

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US stocks one-third non-us stocks. maybe twenty percent of your portfolio is

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invested in high-growth technology. ten percent is in transportation with a lot [pie chart shown]

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of dividend yield. and of course there's always the one percent riboflavin. I

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don't forget that. so yeah when you diversify and two or three of your

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stocks take a dive, well then not all of your eggs are ruined. there are just one

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or two rotten ones in the bunch while the rest are going to be used to cook [smiling man eats eggs]

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one heck of an omelette.

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