Know Your Investment Risk Level

What is investment risk and how much risk should you assume? Simply stated, low risk investments are more stable, with a lower return on investment but more predictable activity. High risk investments can provide a much higher rate of return, but more likely to react with extreme highs and extreme lows, which includes an increased possibility of loss.
And not all investments are purely high or low, black or white. Varying degrees of moderate risk investments are also available. And, just as no single investment vehicle should be selected, no single risk level should be selected.
After you identify the proper risk level for the majority of your investments, also allocate some funds to both slightly higher and lower levels of risk. Diversify.
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