Same as no pain, no gain, it does seem rather logical, doesn’t it? Take on more risk, and potentially get rewarded with more returns.

Not quite.

We’re missing our final element, liquidity. That is what completes the Investing Trinity.

Risk

Risk refers to the probability that the return from your investment differs from your expectation. This is often understood as the probability of losing part or all of your money in an investment. In general, lower risk is desired.

Low risk includes investments such as bonds and fixed deposits while high risk investments include instruments such as stocks.

Returns

Returns refer to the gains or losses made from the money placed in an investment over a period of time. If you purchased a share at $10 and sold it at $11, that’s $1 in returns!