As with all wealth management principles, there are a lot of moving parts. But one major concept that everyone needs to wrap there heads around is the risk to reward efficiency frontier ratio. Even though different research firms might use slightly different names, the idea is always the same.
Equity and Bond markets carry certain risk, and technically speaking they operate within an inverse relationship. That means when one market goes up, the other goes down, and visa versa.Therefore, when taking this inverse correlation into account you can see how having both equities and bonds in your portfolio helps to balance the equation.
The chart below, posted on the Young Research website, is the risk/reward efficient frontier, there is an optimal mix of asset classes that determine how much risk you are taking on in your portfolio vs the potential for reward. The way to read this graph it to understand the mix of equity and fix income holdings. 
The x axis measures how risk and the y axis is the potential for reward. As you can see, the riskiest allocation is 100% equity holdings, but it also has the greatest potential for producing rewards. The least riskiest portfolio, according to this graphic, is perceived to be about a 20/80 mix. Meaning that 20% of your portfolio is held in equity shares and the other 80% consist of fixed income holdings. Notice how placing your entire portfolio 100% in bonds is perceived as taking on more risk for less reward. This is because there is ZERO diversification. 
Now most investors, including myself, have an aggressive investor profile. Follow the link here to learn more about what an investor profile actually is, and how you can use it to determine what strategy is right for you. Personally, my profile is largely determined by my long time horizon. I have a 20+ year window and therefore and withstand the market fluctuations. The most important thing you can do in a down market is STAY INVESTED. It seems counter intuitive but down markets are the time to buy them if you need them, and hold them if you got them.
As I approach retirement age I will adjust my allocation to a more conservative model, and eventually land in the 20/80 capital preservation model when I actually start accessing my funds. 
Now that you know the basic principles of wealth management, it’s time to start learning to tools to implement this ideology to your own financial assets.  
If you don’t have a brokerage account, I recommend using TDAmeritrade, especially if you are just starting out. Personally I have used multiple brokers and eventually closed out all but TDA. By for their platform is the easiest to you, their real time quotes and low costs make them a top choice for money management. You can read about my favorite brokers here, and learn why I ultimately chose TDA by reading this article. To put it into one sentence. TDA has the best platform and lowest fees making them my number one choice for money management.
Not sure what type of account to open up. Read this article and the different types of accounts, and the benefits of each. If you are familiar with the brokerage accounts, you can click here to take it one step further and learn about the different types of financial vehicles that are available to you as an investor, Holding securities in a brokerage account a step, but it is not the only step in creating a properly diversified portfolio.