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This article is from the What Every Investor Should Know.

Section 4. How To Choose An Investment

If you are thinking about investing your money in securities, it is important to obtain reliable information about your potential investments. If you are unsure about how to proceed, you may also want to seek advice from a qualified person whom you trust. But always remember that the final decision is yours. After all, it's your money!

One of the more basic relationships in investing is that between risk and reward. Very often, investments that offer potentially high returns are accompanied by relatively higher risk factors. It is up to you to decide how much risk you can assume. Always keep in mind that your overall financial situation includes both your current and future needs. In general, prospective investors should avoid "risky" investments unless they have a steady income, adequate insurance, and an emergency fund of readily accessible cash. If you need assistance in making the most suitable choices, you might wish to consult books on investing, a registered investment adviser, a broker-dealer, or, in certain cases, an attorney, accountant, financial counselor, or banker.

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