Risk vs. Reward
Understand the fundamental relationship between risk and potential returns in investing
Your Risk Tolerance
ConservativeLevel 5Aggressive
Your Risk Profile
Moderate - You're comfortable with balanced risk and return
Risk vs. Return Spectrum
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Savings Account
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Bonds
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Mutual Funds
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Stocks
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Cryptocurrency
Low Risk
High Risk
High Return
Low Return
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Savings Account
Low risk, low return. Good for emergency funds and short-term goals.
Risk Level:Low (1/10)
Expected Return:2% annually
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Bonds
Government or corporate debt. Moderate risk with steady returns.
Risk Level:Low (2/10)
Expected Return:4% annually
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Mutual Funds
Diversified portfolio managed by professionals.
Risk Level:Medium (4/10)
Expected Return:7% annually
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Stocks
Individual company shares. Higher risk and potential return.
Risk Level:High (7/10)
Expected Return:10% annually
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Cryptocurrency
Digital currencies. Very high risk and potential return.
Risk Level:High (9/10)
Expected Return:15% annually
Understanding Risk & Reward
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Risk-Return Tradeoff
Higher potential returns typically come with higher risk. There's no free lunch in investing.
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Know Your Goals
Your investment timeline and financial goals should determine your risk tolerance.
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Diversification
Spreading investments across different assets can help manage risk while maintaining growth potential.