Quick lesson #6 with Prof. Annamaria Lusardi: Investing 💰

Keep the following important investing principles in mind: - There is a relationship between risk and return. Higher returns are normally associated with higher risk; there is no free lunch in finance! - Do not put all your eggs in one basket. Try to have a portfolio with multiple assets—stocks, bonds, and other assets—to reduce your financial risk. - Pay attention to transaction fees. High fees can erode long-term returns. - Take advantage of the opportunities offered by the financial markets. Academic research suggests that index mutual funds and exchange-traded funds (ETFs) are a low-cost way to achieve diversification.