Basics Of Investing

From Open Risk Manual


Basics Of Investing. In the context of the Financial Competence Framework, Basics Of Investing is a topic in the Planning And Managing Finances subject matter domain.[1]


Mastering the role of Basics Of Investing in financial literacy context requires the following competences:

Code Competency Description Competency Type
178 Knows the difference between saving and investing, and between debt and equity Knowledge
179 Aware that some forms of investment are more liquid than others Knowledge
180 Knows that the value of an investment may increase or decrease Knowledge
181 Knows that different types of fees and charges (one-time and ongoing, direct and indirect) can have a substantial impact on the performance of an investment Knowledge
182 Understands how changes in inflation, interest rates and/or exchange rates may impact on longer-term plans Knowledge
183 Understands the difference between potential (unrealised) and realised losses or gains Knowledge
184 Aware of the additional risks of making uninformed investment decisions Knowledge
185 Understands basic investing concepts such as time-value of money, risk tolerance, investment horizon, and investment objectives Knowledge
186 Can calculate the proportionate increase or decrease of the value of an investment Skill
187 Confident to consider whether specific goals can be met by investing Attitude
188 Confident not to invest if one does not understand the financial product or service Attitude


  1. European Union/OECD (2022), Financial competence framework for adults in the European Union