An individual investor’s decision to pledge capital depends on their appetite for risk. However, a prudent investor knows to generate that appetite based on their own personal circumstances. Common factors that go into investment decision making including things like age to retirement, current savings, level of investment experience, and ultimate financial goals.

It can certainly be the case that a proportion of any portfolio can, when rationally calculated, be allocated to more risky investments than the bulk that it is part of. Generally speaking, the higher the opportunity for return, the higher the risk. He who risks more may have more to gain that he who does not. But, like a gambler in a casino, an investor should appreciate that their decisions can never be predicted with 100% certainty and so investment decisions should be balanced with the preservation of initial principal capital as paramount.