High returns mean that you'll be more likely to make more money from your investments, even if you don't choose the right investments. However, if you don't know what the right investments are, then your returns will be much lower.

All investments are subject to risk and a high-risk investment will usually mean a loss. What does this mean? To calculate your chance of losing money, you'll need to know what you're investing in.

These are some of the riskier investments:

The stocks on the worst stock market crash in history were Enron (no, not the energy company), WorldCom, and Madoff.

However, you can diversify away these risks by choosing the right investments, such as the following:

• Utilities
• Bonds
• Growth stocks (stocks that have the potential to make a lot of money)

I'll explain each type of investment in more detail.

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Utilities

People buy and sell shares in utilities companies for a variety of reasons. This means that their stock prices can change dramatically within a short time.

Investing in utilities can also be difficult because they don't pay dividends. They instead sell electricity or water at a set price that doesn't fluctuate.

I know the utility industry isn't an easy one to understand, but that doesn't mean you shouldn't invest in utilities. If the majority of your household's energy needs are met by utilities companies, then you may be able to secure a better return than a savings account or a high-risk stock.

Utility investments are typically made by professional investors who buy and sell shares based on specific goals. These goals might be to increase dividends and boost growth for companies in the industry.

Which stocks have the highest dividend yield?

The most common dividend is the US's two big utilities stocks, Edison International and Sempra Energy. They currently offer 4.7% and 3.4% dividend yields.

There are also utilities investments that are specific to certain countries. For example, Scottish Power has the lowest yield at 1.5%, but offers the highest growth potential as it is focused on the UK.

Best utility investments for beginners

As with any investment, it's important to find the right investment. Thankfully, one of the utilities investments I like the most is one of the biggest UK companies, British Gas.

British Gas's current dividend yield is 4.1%, which is the highest in the industry. It also offers the highest payout growth rate with a predicted 17% dividend growth next year. This will be helped by British Gas's new dividend policy.

The company has been changing its dividend policy recently, from a progressive dividend to a simple payout ratio of 50%.

This will allow the company to sustain its dividend in the years to come while investing in the company's new online-savvy offerings, including online tools to check their gas and electricity consumption and offer rebates for energy-efficient devices.

If British Gas's new dividend policy proves successful, it'll be a great addition to the high-yield investment portfolio.

Which companies have the best long-term growth potential?

Growth stocks are a popular investment choice for investors because they can offer the best returns over the long run.

However, you need to be careful when choosing the best growth stocks, because the sector they're in is very competitive. The companies are also in a very dynamic industry.

What's the difference between stock markets and bonds?

In the stock market, companies offer shares which you can buy and hold. They pay dividends which can be reinvested in the company, or cashed in.

The value of the company can then rise over time - but as with most investments, there are significant risks involved.

A company can go bust, the company's profits might be cut, or the business might change ownership or be sold on. A high dividend could also disappear if the company halts its dividend payments.

On the other hand, you could buy a government bond.

This is a bond which is sold to investors and holds some or all of the government's debts. If the government runs out of cash and collapses, then your bond is going to suffer as its value falls - this would be similar to a company going into liquidation.

In both cases, you can cash out your investment and receive your money back - but the risk would be different depending on your chosen investments.

The new FCA rules are making it even more important to take an active approach to investing - people are looking to invest, but aren't sure how

Are people better off in cash?

It's likely that in a few years' time, cash will yield less than it does at the moment.

The reason for this is that bond markets are likely to experience a major shake-up, as the Bank of England raises interest rates and the government's deficit shrinks.

So there is likely to be less need for savings accounts which pay next to nothing in interest.

On the flipside, if you do take an active approach to investing, then you might be better off.

Money you put into an investment vehicle called a stocks and shares ISA is taxed as though you are putting it straight into a bank account.

While this might be fine if you have some spare money to put into a ISA, for the majority of us, the money we save will need to be spent and the money we earn will need to be invested.

The simplest way of doing this is to set up a direct debit into an investment provider's ISA, which will then be invested in a diversified portfolio of shares and

Outlook

In the short term, GlaxoSmithKline’s future may look uncertain because of Brexit and the Trump administration’s plan to reduce its corporate tax rate from 35% to 20%.

However, I don’t see these threats as being overly severe and expect that the firm’s management is well-placed to cope with any of them.