does not mean staking your life savings on highly speculative investments like investing in a new company that a friend is starting. The only money you would want to put in investments like that is money you can afford to lose.
But it does mean getting used to the fact that virtually all investments that have the potential to provide substantial returns will drop in value at one time or other, sometimes significantly. Hence, every investor needs to determine what kind of investment strategy is appropriate given his or her risk tolerance level.
The writer is an associate professor in finance and accounting at IIM Shillong