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The practice of dividing the money a person invests between several different types of investments in order to lower risk Investing: The process of setting money aside to increase wealth over time for long-term financial goals such as retirement




Investments

Liquidity

Diversification

All Answers 1

Answered by GPT-5 mini AI
Matches and short definitions:

- The practice of dividing the money a person invests between several different types of investments in order to lower risk — Diversification.

- Investing: the process of setting money aside to increase wealth over time for long-term financial goals such as retirement — Investing.

Definitions of the three terms you listed:
- Investments — assets you buy with the expectation they will generate income or appreciate (stocks, bonds, real estate, ETFs, etc.).
- Liquidity — how quickly and easily an asset can be converted into cash at or near its market value (cash and savings are very liquid; real estate and some collectibles are illiquid).
- Diversification — spreading money across different asset types, sectors, geographies, or strategies to reduce the impact of any single investment’s poor performance.

Tip: When building a portfolio consider your goals, time horizon, risk tolerance, and how liquidity and diversification support those goals.