Why is “risk” an important concept to investors?
Risk is the possibility of losing money. By investing, you are accepting the possibility of losing some money. Risk may vary, depending on the type of investment. Generally, stocks are riskier than bonds. This means that you could lose more money OR you could make more money with a stock. Investors want to make sure they do not lose all their money, so they balance their investments, making sure to include some low-risk types along with higher-risk types.
