Your investing questions, our clear answers.

Our response:

Risk and return are connected. Generally, the higher the risk of an investment, the higher the potential return, but there is no guarantee a higher return will be received by accepting more risk.

While risk cannot be avoided, there are methods that can help reduce it such as, taking advantage of diversification—a way to try to reduce it by choosing a mix of investments, different time-horizons (or the length of time you hold an investment), and understanding your own tolerance to risk can help make informed decisions and reduce risk.

The resources available on GetSmarterAboutMoney.ca will help build your knowledge on investing and other topics including, types of investment risk and types of investments for different time horizons. Speak with a registered financial representative for personalized advice.