Whether you’re investing with a goal in mind, or simply saving for retirement, it’s important to understand risk. Specifically, you should understand your own attitude to risk.
Investing in fixed interest securities (such as bonds) are generally considered lower risk, whilst investing in shares of companies can generally be considered higher risk.
Investment timescale is also an important factor that can influence your investment. Historically markets go up, and they go down. Having an appropriate investment timescale can help to mitigate the impact of volatility. Therefore investors for a longer-term timescale may feel more comfortable taking higher levels of risk as it offers more opportunity for markets to recover from any dips before they access their funds.