You invest because you think that you can make money. However, you can lose money too. That's risk. For example, you could buy a share of stock for $10 and it could increase in value to $50 or decrease in value to $0.
Some stocks are riskier than others. Often the riskier an investment is, the greater it potential gain. A larger potential gain can also mean a larger potential loss. How much risk is appropriate? It depends on three factors:
Your age. The younger you are, the longer yo have to gain back money you lose because you'll be working and investing for many years.
Your financial situation. If you support a family or your saving for a specific short term goal then you will want to take less risk.
Your personality. Some people are adventurous while others are nervous when they feel their money is at risk.
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