Is R-I-S-K Really a Four-Letter Word?

Is R I S K Really A Four Letter Word? Splash image

It is to some—and it is certainly something that most people try to avoid. But in the investment world, risk is impossible to avoid. In fact, risk and long-term rewards are generally related.

Low-risk investments—high-quality bond funds and other fixed-income alternatives—produce more annual income and are more stable, but have no real growth potential.

High-risk investments—diversified stock holdings—can bounce around in value each year, but they offer the potential to grow in value in real, after-inflation terms over long time periods.

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