High Risk Vs. Low Risk Investments Jonathan Bennion-Pedley
Business
High Risk Vs. Low Risk Investments Risk is a fundamental element of investing; there are no investments in the world that can be guaranteed to be risk-free.
However, there are significant variations in the level of risk. Some investments offer a high probability of returns, while others offer the opportunity to potentially make higher returns but with increased risk, meaning there is also a higher chance of losing the initial investment.
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High risk investments can be those made in markets that are highly volatile, meaning the value of the investment can go up and down rapidly.
High Risk Investments
Low Risk Investments
High risk investments can be those made in markets that
Low risk investments typically offer smaller, steadier streams
are highly volatile, meaning the value of the investment can
of income. They can often be entered into with less capital
go up and down rapidly. Investments classed as high risk
and the investor is protected to a degree against loss. While
are those where there is a lower than average percentage
returns are lower, there is more chance of achieving the pro-
chance of the capital being lost or the returns not match-
jected returns.
ing projected volumes. However, when high risk investments work out, the returns are generally significantly higher than those for lower risk investments.
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