Final answer:
The statement is false because guaranteed accounts offer low risk and low returns, whereas higher potential returns are related to higher risk investments such as stocks. Investments should be chosen based on one's risk tolerance and investment horizon.
Step-by-step explanation:
The statement 'If you can afford to lose money you've invested and want the potential of a bigger return on your investment, invest in a guaranteed account.' is false. In the context of investing, higher potential returns are usually associated with higher risk levels. Guaranteed accounts, such as savings accounts, offer very low risk but also low returns. In contrast, investments like stocks offer the potential for higher returns but also come with higher risk due to their volatile nature. Younger investors or those with a long-term perspective may find stocks appealing because they can weather short-term fluctuations and benefit from the higher average returns over an extended period.
When considering investments, it is crucial to weigh the tradeoffs between risk and return considering your life stage and financial goals. As such, if one seeks the potential for a bigger return, they would typically consider riskier assets like stocks, not guaranteed accounts which provide security but limited growth.