Image Description for the Pyramid of Investment
The pyramid shows 4 levels of the investment risk.
- Level 4 – Speculation (Options, commodities, precious metals, speculative stocks, collectibles)
- Level 3 – Growth (Income and growth stocks, mutual funds, real estate, convertible bonds)
- Level 2 – Safety and Income (US Treasury securities, conservative corporate bonds, state and municipal government bonds, income and utility stocks)
- Level 1 – Financial Security (Cash, CDs, savings accounts, money market accounts, US government bonds, retirement accounts)
The top of the pyramid is level 4 which represents high risks. The bottom of the pyramid is level 1 which represents low risks.
From High risk to low risk: Level 4, Level 3, Level 2, and Level 1.