The Biggest Risks (and Rewards) of Investing Always make sure you know a company's pros and cons before you invest.

By Phil Town

Opinions expressed by Entrepreneur contributors are their own.

In this video, Entrepreneur Network partner Phil Town explains a few of the most significant risks and rewards of investing.

It can be risky to invest in companies without sufficient research or businesses that lack a proven track record, and you probably shouldn't trust companies with unreliable leadership.

Town recommends practicing discernment with the efficient market theory and always keeping an eye out for stocks that are price wildly below their value.

In the words of star investor Ben Graham: In the short-run, the stock market is a voting machine in the short term, but in the long-run, it's a weighing machine. This means that underpriced stocks today will often produce rewards later on.

Click the vieo to hear more from Phil Town.

Related: Set Clear Financial Goals by Making Unbreakable Promises

Entrepreneur Network is a premium video network providing entertainment, ewitducation and inspiration from successful entrepreneurs and thought leaders. We provide expertise and opportunities to accelerate brand growth and effectively monetize video and audio content distributed across all digital platforms for the business genre.

EN is partnered with hundreds of top YouTube channels in the business vertical. Watch video from our network partners on demand on Roku, Apple TV and the Entrepreneur App available on iOS and Android devices.

Click here to become a part of this growing video network.

Phil Town is an Investment Advisor, Hedge Fund Manager, 2x New York Times Best-Selling Author of Rule #1 & Payback Time, and Ex-Grand Canyon River Rafting Guide. Rule #1 Investing is Warren Buffett style investing, teaching you how to buy businesses on sale, with little risk and 15 percent returns. In fact, Rule #1 investing is practically immune to the ups and downs of the stock market.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Science & Technology

101 Small Business Ideas to Match Your Personality, Investment, Skills & Goals

Still stuck on what biz to start? Use AI to uncover 101 custom ideas aligned with your skills, values & lifestyle—plus a 90-day roadmap to launch with clarity.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Side Hustle

She and Her Sister Started a Side Hustle to Help People Elevate Their Homes — Now Their Brand Pulls In Hundreds of Millions: 'Get to Work'

When Lee Mayer moved from New York City to Denver, Colorado, she wanted to find an affordable, fun way to decorate her home.

Growing a Business

Why Storytelling (Not Selling) Is Your Most Powerful Branding Tool

A thought leader is a sum of their stories. Learn why sharing your unique thoughts, feelings and perspectives can help you stand apart from other experts in your field.

Business Solutions

Access 25 Hours of AI Training for Less Than $20

This e-degree gives you hands-on AI training that's perfect for entrepreneurs wearing many hats.

Business News

'One of the Most Consequential Bills Ever': Here's How the 'Big, Beautiful Bill' Will Affect Small Businesses

President Donald Trump is expected to sign the multi-trillion-dollar bill on July 4.