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Unable to find a way to spend it all, Steve decides to save and invest most of his winnings. He begins searching financial magazines and the internet for the best way to build his capital.
Steve faces an issue that many investors today face?not a pessimistic girlfriend, but rather how he should invest his money. In his research, Steve has found that there is a commonly accepted investment style that is focused on diversification of risk. Risk in terms of investing is based on the possibility of losing your money. For example, stocks are higher-risk investments where government bonds are considered lower risk, because stocks are shares of ownership to a certain company, which could see hardships at any given time, while government bonds are guaranteed by the country's treasury to ensure that the investor is paid when the bond is due...
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