Investing can be a rewarding activity which can help you meet your financial goals; however, investing can be complex and often comes with risks. With appropriate knowledge, you can choose the level of complexity and risk that you are comfortable with. Key factors You need to know at least three key factors about every investment- return, risk and liquidity. Return is the profit that an investor makes on an investment. It can come in two different forms: income or capital gain. Risk means uncertainty. You are not sure whether your investments will give high returns or you could also lose your money. Risk and return both go hand in-hand which means that to get higher return on your investments you will be exposed to more risk. Liquidity is the ability to cash in or sell an investment quickly at or near the current market price. It affects the value of an investment. Listed stocks and goverment bonds are liquid, because you can usually sell them easily. Investing goals Your investment goals depend on which life stage you are in (student, employee, retired, etc.).Your investment goals will be different from those of other people, and the goals will change as you go through your life. Usually, you have a variety of goals at the same time. You may be looking for long-term growth in value and also want a secure and flexible fund for emergencies. Each household will have a variety of objectives and will need a different investment strategy for each one. One easy way to see how personal factors affect investment choices is to think about your life stage, the phase of your life that you are in.