There is no free lunch in investing.
Direct answer
Risk and return are linked. Investments with higher possible returns generally carry greater risk of losing money or of big swings in value. Lower-risk options like cash tend to grow more slowly. The right balance depends on your goals, timeframe and comfort with losses.
A simple spectrum
| Lower risk, lower expected return | Higher risk, higher expected return |
|---|---|
| Cash and savings accounts | Individual company shares |
| Government bonds | Emerging market investments |
| Short-term deposits | Speculative assets |
How to choose
- Define the goal and when you need the money.
- Consider how you would feel if the value dropped 20 percent.
- Match risk to time: money needed soon belongs in lower-risk places.
- Diversify to avoid concentrated risk.
Where Teyro fits
Teyro's How to Understand Investment Risk course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
Take only as much risk as you need and can handle. This is general education, not advice.
This is general education, not personal financial advice.
