Investment pyramid - How To Discuss

Investment pyramid,

Definition of Investment pyramid:

1. Investment strategy that funds an investment portfolio according to the relative safety of different investments. Largest portion of investable assets (bottom of the pyramid) goes in low risk, low yield investments. Progressively smaller portions are used for growth investments (middle of the pyramid) and speculative investments (apex of the pyramid).

2. An investment pyramid, or risk pyramid, is a portfolio strategy that allocates assets according to the relative risk levels of those investments. The risk of an investment is defined in this strategy by the variance of the investment return, or the likelihood the investment will decrease in value to a large degree.

3. The bottom and widest part of the pyramid is comprised of low-risk investments, the mid-portion is composed of growth investments, and the smallest part at the top is allocated to speculative investments.

How to use Investment pyramid in a sentence?

1. The strategy calls for allocating the largest proportion of capital to the low-risk assets at the bottom, and the smallest amount to the speculative assets at the top.
2. The investment pyramid is an asset allocation strategy that investors use to diversify their portfolio investments according to the risk profile of each security.
3. The pyramid, representing the investor's portfolio, has three distinct tiers: low-risk assets at the bottom such as cash and money markets; moderately risky assets like stocks and bonds in the middle; and high-risk speculative assets like derivatives at the top.