Stock market investment is only as risky as you want it to be.

Many people shy away from the possibilities of investment due to the potentially high financial risks that are involved; however, many don't take into account that investors have the ability to choose the level of risk in which they place their money. Whether you're an experienced investor or just thinking of testing the investment waters, rest assured that there's an ideal option for you.

That said, people have different attitudes towards risk and, generally speaking, investors can be grouped into one of three categories: low-risk, medium-risk and high-risk investors. Low-risk investors are usually looking to gain better returns than those offered by a bank or building society bank account; they're therefore willing to place a limited portion of their funds into stock market investment. However, low-risk investment portfolios have limited exposure to equities; what's more, returns are slightly above, the same, or even below the inflation rate which often means that investment will fall in value over time. So while a cautious approach may prevent sudden loss, it can also inhibit the potential for an investor's money to grow.

Medium-risk investors, however, are usually looking for a significantly higher spending power and are therefore likely to place more of their money into the stock market. And while this means that their portfolios have greater exposure to risky investments, like equities, such investments have the potential to perform better over a longer period of time.

High-risk investors are interested in higher total returns, and thus account for the greatest portion of money placed in stock market investment. A high-risk investor's portfolio is likely to be governed by equities, with perhaps a small percentage of bonds or cash. In high-risk investment, money is subject to greater fluctuations and, therefore, greater potential loss. Such instability means that there is no guarantee of a positive return in any given year, making this type of investment unsuitable for anyone who requires a consistent income. However, higher-risk investments tend to grow faster than more stable investments - so, over time, an investor would increase their chances of achieving higher total returns.

What type of investment is right for you? There are a few points you should consider first: do you have specific financial goals in mind, like retirement funding or a major purchase? You should also consider whether you're looking for immediate return or if you'd rather achieve a steady income from your investments. If the latter describes your situation, for example, low-risk, income-yielding investment would be more appropriate for you. These are important deliberations, since the first step in the process of investment is to clarify your financial priorities. This is because a 'good' investment isn't necessarily determined by how well it performs in any given year, but is, rather, dependent on your circumstances. Once you determine your financial priorities, you can begin to consider your investment options.

That said, it's also important to consider the level of risk you're willing to accept and, while it's essential to understand and act upon your own attitudes towards investment, it's always helpful to gain insight from qualified advisers. If you have doubts and anxieties about investing, a financial adviser can help you sort through the wide range of investment options to find those that match your investment goals. What's more, they can thoroughly explain levels of risk, reward and protection. And if you're an experienced investor, an adviser can help you effectively evaluate your investment circumstances and, if necessary, help you make amendments or work towards enhancement. Many stock brokers offer a comprehensive set of products and services to help you get started or continue with your investment aspirations. So consider your options today - and remember that investment is only as risky as you make it.

About the author:
Andrew Regan is an online journalist who enjoys socialising at his local rugby and cricket clubs.