The stock and bond markets are vast
Stocks and bonds are the meat and potatoes of investing. In general, buying a stock is more risky than buying a bond. Some stocks are less risky than others, though.
For instance, you probably will do better with an investment in Johnson & Johnson, a large company, versus a wobbly, small company with uncertain earnings potential. Conversely, because a smaller company is more likely to grow a lot versus an established global brand, the potential for a big payoff is greater.
Bonds act in a similar fashion, with very risky companies offering higher returns while very safe borrowers, like the U.S. government, pay very low interest rates.
No matter your situation, there is a mix of investments that will satisfy your goals and risk tolerance — as long as your goals and ability to withstand risk are realistic and not a fantasy. You can’t expect a 100 percent return in three months with no risk.
Planning should reduce risk: Part I