“After reading your column last week on being less fearful about investing, I think I need to take more risks with my money. Everything I have is in a savings account earning very little interest and I want to try something else that can make more. How do I go about figuring out how much to risk?”

I got many interesting responses to last week’s topic on fear and investing. Some people were willing to jump headfirst into riskier investment options, as they were tired of earning minimal returns. Others were still terrified about the thought of losing money, but readily admitted that they were not satisfied with how their money was growing in basic savings accounts.

Two reasons why people invest their money are to increase the original sum invested, or to create a source of regular income. Risk is simply the chance that the outcome of your investment will be less than expected. This can include losing some, or all of the initial principal, or not getting the return you had hoped for. Continue reading How Much Risk Is Right For You? →