High Risk Vs. Low Risk Investments

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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