financial pyramid


Investment structure designed to break up investments into three main levels (low, middle and high), which correlate with a risk level. Smart and cautious investors will usually put a bulk of investment at the lowest level of the pyramid to ensure profitability and stability. The remaining investments are placed at the middle and high levels depending on the investor's confidence in the investment, and the amount of risk they are willing to take on. A strong base or lower level of the pyramid is essential for investors to fall back on if other middle and high level investments fail.

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You should try to make sure that you are doing your best to work your way to the top of the financial pyramid.

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When undertaking an investment strategy, a young person can begin at the highest and riskiest third of the financial pyramid, and gradually moving the bulk of his/her cash down over time, when security becomes more important.

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The young couple had a strong feeling about the potential of the new company so they placed more of their investment assets into the higher levels of the financial pyramid as it provided more opportunity for growth.

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