Final answer:
Gina Davidson is most concerned about the risk factor of investing since it involves uncertainty about potential returns and losses from stock investments, which are subject to volatile price changes. Stocks typically offer higher average returns compared to bonds and savings accounts but with greater risk. High-risk investments do not necessarily equate to low returns; they can also lead to high returns, which highlights the importance of diversification.
Step-by-step explanation:
Gina Davidson is most concerned about the risk aspect of investing, which refers to the uncertainty she faces regarding the returns she might earn from her investments. When discussing stock investments, we highlight that stocks offer the potential for high returns in the form of dividends and capital gains, but they also carry the risk of significant losses, as stock prices can fluctuate dramatically. For example, Netflix's stock price experienced substantial changes over the years, which is a testament to the volatile nature of the stock market.
Overall, when comparing stocks, bonds, and savings accounts, stocks tend to offer the highest average returns over time but come with the highest level of risk. Bonds usually provide lower returns but with more stability, while savings accounts offer the least risk and the lowest returns. The fear that a high-risk investment is likely to have low returns is not necessarily true, as high risk is associated with the potential for both high and low returns, underscoring the need for diversification to mitigate risks.