Investment-illiterate

Investment-illiterate describes an individual who lacks the fundamental knowledge, skills, and understanding necessary to make sound financial investment decisions. This lack of understanding can encompass various areas, including comprehending financial products (stocks, bonds, mutual funds), assessing risk tolerance, calculating returns, diversifying portfolios, and understanding market dynamics. Being investment-illiterate often leads to poor financial outcomes, such as missed opportunities for wealth creation, making risky investment choices, or being vulnerable to financial scams. It can stem from a lack of financial education, unfamiliarity with financial concepts, or a lack of confidence in making investment decisions.

Investment-illiterate meaning with examples

• Many retirees were left financially vulnerable because they were investment-illiterate, lacking the knowledge to diversify their savings. They were unaware of the risks and returns associated with different investment vehicles, leading them to put all their eggs in one basket.
• Her financial advisor took advantage of her investment-illiteracy, selling her high-commission products that didn't align with her long-term financial goals. He preyed on her lack of understanding of market performance and investment strategies.
• The school's financial literacy program aimed to combat student investment-illiteracy. It taught them basic concepts, such as budgeting and saving, and the benefits of informed investment decisions early in their lives. This was to secure a financially stable future.
• A survey revealed a high percentage of the population remained investment-illiterate, particularly concerning understanding compound interest and the effects of inflation. The information suggested a need for increased public education on financial markets.