Activate Your Money

CHAPTER 3Your Financial Foundation: Master Some Core Principles

You need the same knowledge and tools to make sound investments, regardless of whether they are values-aligned or not. Since our society has not done a great job of educating women about basic investment concepts, investing can be intimidating or overwhelming for a lot of us. Lisa Leff Cooper, an investment expert and contributor to this chapter, has witnessed over and over again how knowledge about a few key investment concepts can go a very long way toward empowering individuals in making wise and informed investment decisions. She has found this to be true for all types of investors, such as recent graduates new to saving and investing, mid-term careerists, newly single women, recipients of new wealth, and women entering retirement.

Even though this book is not intended to teach the basics of personal finance, there are a few important concepts that anyone diving more deeply into their investments needs to understand. This chapter touches on those fundamentals. After reading it, you'll know if you're ready to invest, where you stand financially, and what your investment priorities are. You will also be introduced to the major asset classes as well as the concepts of portfolio diversification and asset allocation. When you complete this chapter, you'll have the foundational elements you need and the beginnings of your own investment strategy.

If you feel confident with your overall investing knowledge, feel free ...