Some Conclusions About Risk Risk has more to do with fluctuation in return than danger to your investment. The most potentially lucrative investments are also the riskiest. You have to be prepared to make a trade-off. The risks for each type of investment can come from a variety of sources - business conditions, political changes and others. These are often the same factors that contribute to good performance as well.
Market risk is short-term.
Your ability to invest aggressively is directly related to the amount of time you have to invest. Risk can be reduced through diversification and smart selection of investments. As you get older, you should move into less volatile investments. Market timers usually get burned. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice.