Business and Personal Finance Dictionary

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• FINANCIAL PYRAMID
  
  Many investors allocate their investments in what's described as a pyramid structure. A typical financial pyramid has four levels: The majority of assets are in safe, liquid investments that form the base of the pyramid. The next level is composed of securities that provide both income and longer-term capital growth. At the third level, a smaller portion of resources is invested in more speculative investments with higher potential returns. And the top level, containing the smallest percentage of the overall portfolio, is invested in ventures that have the highest potential return but also the greatest investment risk. Using a financial pyramid to distribute your investments allows you to balance need for stability with your desire for a higher return.
  
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