This article was originally posted on DollarsAndSense.

In today’s low interest rate environment, everyone is talking about how investing can get you a higher return than just letting money “rot” in the bank. While investing is not rocket science, neither is it child’s play – people have lost fortunes and ruined their lives doing it wrong.

In this article, we discuss some basic principles that every investor should consider when they are making their investments. These principles may seem fairly straight forward, but once you are investing with real money and your emotions take over, a reminder of these basic concepts may save you from making rash decisions.

# 1 The Relationship Of Risk And Return

One powerful relationship investors need to understand is that between risk and return. This basically means that the more risks you take, the higher the return you can should expect…