There's a third practical factor, namely the work required to effect the investment, in the way of research, talking to agents and so on. In reality this last factor keeps most of us using bank accounts - that with which we're familiar. This last factor is, practically speaking, the cost of the investment. If the cost is purely financial, it kind of melts into the return, and we're left with those two classical factors, risk and return. If you have large sums of money and motivation to invest wisely, or are just very good at investing, that's generally what happens in my experience - that is, the non-financial costs (your time, energy, motivation, worry and so on) aren't very high when compared to the large sum of money at hand. Hence, it's not much talked about. Risk and return are.
In practice you'll find that risk and return are, in what we call a free market (just another imaginary beast really, but let's not sidetrack too much), strongly related. The higher the return, the higher the risk.
On one end of the scale you have very secure investments, which are government-backed. Your chances of losing your money are slim; in fact, effectively zero, as the governement secures it (not that governments are immune from bankruptcy, but they're not especially susceptible - we should hope). The return on these secure investments is appropriately low.
On the other end of the scale you have investments promising a high return. These are most commonly stock in small promising companies, the sort of stocks that rise in price fast ... if at all. That is, the risk is also high.
Well, it's a natural phenomenon, really. If you're looking to attract investment, or if you need money for a project, you have to promise the investors a return which matches their perceived risk of your venture, basically. Financially we speak of a risk/return ratio, which is among all investments relatively similar - it is forced to be, by a freely operating market. If a high-return, low-risk investment existed, say, then everyone would buy it, the cost would rise, and the return drop. If a high-risk, low-return investment existed, no-one would buy it, the cost would drop, and the return would rise. Of course, no market is entirely free, being a little obscured by the uneven flow of information (meaning only that for a short moment high-return, low-risk options pop up, until everyone notices!).
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