There’s a wide range of financial products to choose from. Each product has its own special features.
Some investments carry a low risk but also generate a lower return. Others provide higher potential returns but are riskier.
The chart below shows that the higher the potential return, the higher the risk!
There’s also what are called guaranteed investments. In some cases, only the money initially invested by you, known as the principal, is guaranteed; in others, both the principal and the money you earn on the investment, known as the return, are guaranteed.
Below are some popular types of financial products and an indication of the level of risk associated with each type:
Guaranteed investment certificate with a fixed rate of interest at maturity
risk is not the only factor that needs to be considered when choosing an investment product. You also need to know the description of the investment, its potential return and its liquidity (possibility of withdrawing the investment quickly without a penalty). But most of all, you need to figure out what type of investor you are!End of the warning