Splitting Your Money Up
Choose how much of your money goes to stocks, bonds and cash.
The idea
Asset allocation just means how you split your money between different types of things, usually stocks, bonds and cash. Stocks are pieces of companies and their prices tend to move around a lot, bonds are loans that usually pay steady interest, and cash mostly sits still. Nobody knows which type will do best in any single year, so most investors choose a mix instead of putting everything in one place. Your mix usually depends on when you will need the money and how much bouncing around you are okay with. 🥧
Words to know
- asset
- Something you own that has value, like a stock, a bond, or cash.
- asset allocation
- How you split your money between stocks, bonds and cash.
- stock
- A tiny piece of a company that you can own.
- bond
- A loan you make to a company or government that usually pays you interest.
- cash
- Money that sits ready to use and does not change much in value.
Try it — no account needed
True or false? Swipe to say what you think.
Asset allocation means picking the mix of stocks, bonds and cash you want.
In the full lesson
- 1True or false
- 2Put it in order
- 3Make the call
Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.
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