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Passive investors are less inclined to make market position changes. They tend to "buy and hold" for a longer period of time.

A perfect risk-expected rate of return relationship can be seen when comparing financial instruments such as bonds, stocks, and money market instruments.

Risk-averse investors would quite be likely happy to choose stable instruments such as the traditional fixed deposits and bonds. Saving with banks and investing with bonds issued by the governments virtually offer little or no risks compared to investing in the stockmarket which is more speculative and risky.

It is very unlikely that the government will default its payment obligations but corporate bonds to offer some default risks. This where rating companies such as the Rating Agency Malaysia Berhad (RAM) and Malaysian Rating Corporation Berhad (MRCB) will play a key role in determining the credit worthiness of those companies issuing bonds.

"Zero" risks investments normally produce performance with slow returns over a longer period of years. Generally, these two form of investments are not popular among Malaysians who are normally fast-money oriented and prefer to invest in speculative stocks.

In Malaysia, stocks offer the greatest risk dimension but attract the largest portion of local investors. The "speculative-nature" of stocks listed on the Second Board may produce instant millionaires but have also caused many overnight bankruptcies among others.

Investing for a shorter time in the hope of a very huge return or a windfall is very much like gambling - a game of chance. Your fate is dependent on the roll of a dice. Certainly it is not a rational way to invest your hard-earned money. Although hard to resist fast-gains, you should only undertake this form of investment when you have a large supply of surplus funds.