risk and return

in picking the kind of investment that you want to buy one has to consider the risk involved. risk is merely the uncertainty or volatility (deviation from expected return) of the investment. the higher the return the higher the risk. hence if you put your money in an investment that promises a high return you'd expect the risk to be high as well, or vice versa. there are 3 kinds of investments that are normally of interest, cash (keeping your money in the bank), equities (buying a share/stock in the JSE) or real estate (dealing in property, either for rental or for buy-hold-sell).

each investment type, has a risk and a commensurate return. generally your equities would be riskier, hence you'd expect a higher return from buying shares. and your cash investment would be the least risky hence a low return would be expected from them. and as it turns out normally the returns from buying a share in the JSE would be higher than just putting your money in the bank. these are the easy rules that one normally expects in terms of risk and return in the world of investments. there are experts in the market who price risk and price returns accordingly. and these experts are paid accordingly to provide advice on risk and return. which is why every now and then we get charged transaction costs whenever we buy investments.