You were also encouraged to build equity in your home, be thrifty and start a regular investment programme which may include include unit trusts, bond trusts, and listed property trusts.

Assuming that your base is strong, you will now be introduced to other exchange products that take on a higher risk profile.

Are these products suitable for you? Only you can answer this question. Remember the choice of condominiums in the first lesson? Did you choose the view or the safe ground floor?

If you had chosen the view, it means you are more of a risk taker. To take on risk, you must understand the products and be able to manage the risk. Below are some investment instruments and the main risks, disadvantages, rewards and benefits.

	Risks/Disadvantages	Rewards/Benefits
Main Board Shares	Underperformance Market risk	Stability Growth Seasoned companies
Small Cap Funds	Underperformance Market risk Market volatility Unseasoned companies	High growth Diversification
Second Board Shares	Underperformance Market risk Companies are unseasoned Market volatility	High growth Ground floor opportunities
Warrants	May expire worthless Market risk Underwriters routinely overprice warrants No dividends	High gearing
Margin Financing	Underperformance Market risk Loss of all capital High interest charges	High gearing Dividends
Options	Usually expire worthless High premium costs Unlimited risk to the seller	High gearing Unlimited gain
Futures	Unlimited Risk	Unlimited gain