Choosing And Diversifying Investments

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Choosing And Diversifying Investments. In the context of the Financial Competence Framework, Choosing And Diversifying Investments is a topic in the Planning And Managing Finances subject matter domain.[1]


Mastering the role of Choosing And Diversifying Investments in financial literacy context requires the following competences:

Code Competency Description Competency Type
190 Knows the characteristics of various investment products including levels of risk, liquidity, expected performance and sustainability features or can find out easily Knowledge
191 Knows that fees, commissions and other charges may be made for investment products and services and that these items may vary depending on the provider and the sales channel Knowledge
192 Knows that prices for the same investment product may vary across providers and sales channels Knowledge
193 Knows that different investment products may have different sustainability characteristics (environmental, social and corporate governance) Knowledge
194 Understands the benefits of holding a diversified portfolio of investments Knowledge
195 Knows why it is important to consider overall asset allocation when investing Knowledge
196 Aware that various brokers and trading tools exist that can be accessed through different traditional and digital means Knowledge
197 Considers risk, performance, costs and other investment characteristics when managing and monitoring investments Skill
198 Monitors investments periodically and makes adjustments as necessary Skill
199 Able to incorporate personal preferences with respect to investment goal, risk tolerance, time horizon and sustainability, when making an investment decision. Skill
200 Can retrieve relevant and reliable information to inform investment decisions Skill
201 Researches potential investments Skill
202 Creates a diversified portfolio Skill
203 Is able to combine various investment products such as pensions, life insurance policies, endowments, collective investment schemes or other investment products where appropriate Skill
204 Confident and motivated to undertake research on potential investments before committing Attitude
205 Confident and motivated to compare the level of sustainability of investment products using for example other standards, labels or ratings Attitude
206 Confident and motivated to question investment offers that appear too good to be true Attitude
207 Confident and motivated to compare the investment portfolio composition of pension funds, life insurance policies, endowments, collective investment schemes or other investment products in order to assess their suitability in a holistic way Attitude
208 Confident and motivated to not to let one’s own investment behavior be guided by fear of missing out Attitude
209 Willing to provide relevant personal information to the intermediary for a suitability assessment Attitude


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