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Chapter 1. Introduction > Categorizing Investment Stories

Categorizing Investment Stories

Investment stories come in all forms. Some are designed to appeal to investors who do not like to take risks, and they generally talk about low-risk ways to play the stock market. Others are oriented toward risk seekers who want to get rich quickly; these stories emphasize the potential upside and hardly ever talk about risk. Still others are structured for those who believe that you can get something for nothing if you are smarter or better prepared than others in the market. Finally, there are stories for the optimists who believe that you always win in the long term. In this section, you will get a preview of the stories that are examined in detail in the coming chapters.

Stories for the Risk Averse

Some investors are born risk averse, whereas others become risk averse because of circumstances—an insecure job or impending retirement can make you far more concerned about losing money. Still others are scared into risk aversion by an extended bear market. Whatever the reason for the risk aversion, the investment stories that sell the best to these investors emphasize low-risk strategies while promising much higher returns than they are making currently on their safe investments.


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