Page 43 - Workbook3E

Invest Today For Tomorrow
Your Investment Objectives:
Describe your investment objectives and your timeline for each objective. Feel free to use the ‘Note’ section in the back if you need to:
#2 Money Needed by: Investment objective:
2 Know Your Tolerance for
Investment Risk
A basic rule applies to most profitable investments: “The greater the risk, the greater potential for reward.” If this rule doesn’t hold true, it’s probably an unprofitable investment from the outset. If the return is not in line with the risk of the investment, you should avoid it at all cost. But if you can find an investment with limited risk and great potential for reward, consider it by all means.
Two questions are important for you to ask:
a. Are you comfortable risking some of your principal for a potentially greater reward?
b. Would you rather accept a lower return in exchange for greater safety of your investment capital?
Your time horizon is a factor in deciding your investment risk limits. Generally, the longer your time horizon, the greater risk you can withstand.
“Riches well got and well used are a great blessing.”
~ Thomas Fuller
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