13/12/2025
Q1: What’s dollar-cost averaging, and why does it work?
A: Dollar-cost averaging means investing a fixed amount at regular intervals. It smooths out market volatility, reduces emotional decision-making, and helps you steadily build wealth over time.
Q2: How diversified should my portfolio be?
A: A well-diversified portfolio typically includes a mix of equities, bonds, and global markets. The goal is to reduce risk by ensuring no single investment can significantly impact your total portfolio.
Q3: What’s the difference between “risk tolerance” and “risk capacity”?
A: Risk tolerance is emotional—how much volatility you can comfortably handle.
Risk capacity is financial—how much risk you can take based on your timeline, income, and financial goals.
Both matter when designing a portfolio.
Q4: Should I invest if I have debt?
A: High-interest debt (like credit cards) should usually be paid down first.
Low-interest or structured debt (like mortgages) can often exist alongside investing, especially if your long-term goals require early market participation.
Q5: What’s a realistic long-term return expectation?
A: Historically, diversified portfolios return 4–7% per year after inflation.
Expecting more can lead to unnecessary risk. Consistency and patience often matter more than chasing high returns.
