History

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What does this mean? Thank you for explaining this stuff to me. This is just a confusing topic for me.

Without the "risk" factor of investments, there will be less financial gain. ( Would this be considered a negative effect that global peace would have on economics)

  • History -

    Yes. If you follow the stock market, many people are "risk takers" but that means either they will make a lot of money, or lose the investment! If it's a "sure thing" it isn't necessary to "discount" fees or increase the interest. Investing in "Penney Stocks" means you won't lose much money but neither will you gain big profits.

    Sra

  • History -

    Safe investments -- like bank accounts -- are sure to keep your investment. These are almost always risk-free investments.

    However, the more risk you're willing to take the larger amount you MIGHT make if the investment is successful.

    Let's consider how you might "invest" $5,000.

    The least risky is to put it under your mattress. You won't lose it, but you won't make any money on it.

    You could buy a government bond, which has almost no risk, but you won't make much money in interest.

    You could invest in stock in a company. This is risky. You might double or triple your money in 2 years if the price of the stock goes up. You might lose over half of your money if the price of the stock goes down.

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