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Chapter 6. Foolish Risks

Savers keep their money safe by putting it in the bank. Investors take on risk in the pursuit of higher returns. Risk means that there is a chance that you can lose money. The shorter the time period you have to invest, the higher the chance of losing money. Money you need within the next couple of years should be saved. Money you don't need for a longer period of time can be invested. However, investors don't fully understand the risks they are taking. Indeed, people frequently take the wrong types of risk.


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