Investing is a trade-off between Risk and Return. On the one hand, lower-risk investments may guarantee your money but often provide lower returns.
On the other hand, many investments striving for higher returns can come with a greater level of risk. The trade-off is finding the right balance for you.
Your written investment plan (also called an Investment Policy Statement (IPS)) should detail the amount of risk you are comfortable with, along with your expected rate of return.
Your plan should be based on the following variables: