Skydiving, horse riding, golf. Each sport has their own level of risk and reward. Some people would never dream of going skydiving. However, over a million thrill-seekers each year happily jump out of a plane for the exhilaration of it.
The same goes for the stock market. The riskier your investment, the higher its potential return. Your challenge as an investor is to know the risks and decide how far you are prepared to go.
Tips and tricks
With every investment, there will be a point when there’s simply too much risk to justify any potential return. So put on a lifejacket, or turn the boat back around.