- Different investments have different levels of risk
and reward.
- In investment terms risk means the degree
of fluctuation - as well as the chance you might lose your money.
- Generally:
- the higher the rewards, the higher
the risk.
- the longer you hold an investment the lower
the risk (eg in any one year there might be a 25% chance
the stock market will fall, but the chance of a fall over 10 years
is remote).
- Know the risks and rewards for any investments you are considering.
- Knowing your goals means you know the degree of risk you need to accept
to fulfil them...
- if you can meet your goals with a certain level of risk, why make
riskier investments?
- Know your own risk tolerance.
- Don't make any investment you are not comfortable with.
- Know also that there is a risk in non-investment,
- money kept under the mattress may be stolen by robbers, or eaten
away by inflation.
Discover your risk tolerance with:
Risk
Quizzes from the Investor Education Fund
MSN
Money's Risk Tolerance Quiz
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