home about us glossary media site map



Risks & Rewards

The pyramid shows the risks and rewards of different types of investments.

Investments with lower risks and lower returns are at the bottom of the pyramid – where the large base makes it stable. As you move up the pyramid, returns usually become greater, but so do the risks.

As an investor, you should move up the pyramid only after you have built a strong foundation. And only if you decide that you are comfortable with the idea of risking your money. While higher rates of return at the top are tempting, keep this in mind: there is no guarantee that higher-risk investments will actually give you higher returns.