Investments providing the best returns over time also have been those that typically have involved the greatest risk.

Market volatility creates risk and opportunity. Different types of investments have different amounts of volatility. Investments that fluctuate widely in price from the expected return have more opportunity for gain as well as more opportunity for loss.

By understanding your risk tolerance, you can eliminate any type of investment that doesn't fit your criteria.

Based on my needs, concerns, and risk tolerance, I consider myself to be a ____________________ investor.

Type of Investor	Type of Investments	Expected Price Deviation (in percent)
Conservative	Greatest allocation to fixed income (bonds, CDs and savings)	6-9
Moderate (low to medium risk)	Significant allocation to investor equities (stocks, mutual funds)	8-11
Maximum Return Investor (high risk)	Predominantly equities, including foreign and aggressive	10-15 or more

Source: Kathryn M. Anderson, C.F.P., C.P.A., Grayslake, Illinois