Risk for growth
You must decide how much risk you want to take with your money. If you come over all faint at t he very idea of losing cash, then steer clear of the riskier investment opportunities and stick to deposit accounts and guaranteed growth bonds. If you are prepared to take some risk in the pursuit of potentially higher returns, then stock market investment might be for you. With growth investment you have time on your side to ride out any short-term fluctuations in markets.
Funds which are generally regarded as at the lower end of the risk spectrum include those with a high bond content. Funds investing overseas, particularly in so-called emerging markets, are at the higher end of the risk spectrum, as are those funds which invest in small or specialist companies.
Most investors will want to overlook individual shares in favour of a collective investment which offers exposure to a wide range of shares at less risk. But this does not mean growth seekers cannot make good use of shares, particularly in the early years of their investment period.
TIP: A sensible plan is to invest in higher risk shares early on in your investment cycle and in less risky areas, such as unit trusts or deposit-based instruments, when your investment period is coming to an end. If things go awry early on you have still have enough time to recover your position.