Risk & Reward

Every investment carries some level of risk.
The key is to balance risk with the potential reward so your portfolio matches your goals.

Types of Risk

• Market Risk — prices can fall due to economic changes.
• Credit Risk — borrowers may default on bonds or loans.
• Liquidity Risk — some assets are harder to sell quickly.

Balancing Risk

• Younger investors may accept more risk for higher growth.
• Older investors often prefer safer, income-generating assets.
• Diversification helps spread risk across different asset types.

Example

Stocks may offer higher returns but can be volatile.
Bonds are steadier but usually grow slower.
A mix of both balances growth and safety.