Their value is subject to change based on market conditions. Real estate is the fourth investment category, and one in which many people have built wealth. Adding sweat equity to property can help you build net worth. Diversification is investing in several different types of investments. Allocation is deciding what percentage of your portfolio goes into stocks, bonds and cash or mutual funds that invest in them.
Volatility is how much and how quickly the value changes.
Risk is the chance you take in getting a poor return or losing money. Return is what you get back, based on what you invest, usually measured on an annual basis. Yield is the income received as a percent of what the investment cost. Risk Tolerance is knowing how much risk you can live with. Most investments will drop in value at some point.