We always heard that many people are saying high risk investment come with higher return. But how do we know which investments have higher return with higher risk and vice versa.
There are 3 level of investments risk namely conservative, moderate and aggressive with potential return ranging from 3 percent and up to 20 percent. The most commonly type of investments from lowest to highest potential returns are government securities, fixed deposits, bonds, investment linked insurances, equities and options/warrants.
The chart below illustrates the risk and potential return of the common types of investment products.