Every investment carries risk — the chance you might lose money. Higher potential returns usually come with higher risk. Your time horizon and goals should determine how much risk you take on.
Answer: The chance your investment loses value. Risk is the possibility that your investment returns less than expected — or turns negative.
Answer: Stocks. Historically, stocks have outperformed all other major asset classes over long time periods.
Answer: Take more risk. With more time, you can ride out short-term market volatility and recover from downturns.
Answer: Spread risk across different assets. Diversification means not putting all eggs in one basket — losses in one area can be offset by gains elsewhere.
Practice this with $10,000 in virtual cash in Tradecraft, free paper trading with real market data.
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Educational content only, not investment advice. Tradecraft is a simulator; no real securities are bought or sold.