Golden Pyramid of Investing Risk

There is various asset class to invest in. From Bonds, Equities, Real estate, cryptocurrency.

One must find one asset class that suit their risk appetite

The classic definition of risk is measured in volatility, which is how much and how quickly the value of an investment can change.

According to this definition of risk, here's how various assets stack up:

HIGHER RISK

- Cryptocurrency

- Commodities

- Futures

- Options

- Junk Bonds (BB+ and below)

MEDIUM RISK

- Growth stocks

- Small company stocks

- Medium-rated bonds (BBB+ to BBB-)

- Mutual funds

- Real estate

LOW RISK

- Blue chip stocks

- Investment grade bonds (AAA to A-)

- US Treasury bonds and notes

LOWEST RISK

- Savings accounts

- Money market funds

- CDs

- US Treasury bills

- Fixed annuities

With that being said, here are two quote about risk that everyone should keep in mind.

"Risk comes from not knowing what you're doing." -- Warren Buffett

"The biggest, least mentioned risk of all -- is not taking enough risk." -- David Gardner


I have created this Pyramid of different investment risk.

Do let me know in the commment what is the main instrument you are using to build your wealth