The higher the risk, the higher the potential return, and the LESS LIKELY it will achieve the higher return

UNDERSTANDING RISK

The rule of thumb is "the higher the risk, the higher the potential return," but you need to consider an addition to the rule so that it states the relationship more clearly:  the higher the risk, the higher the potential return, and the less likely it will achieve the higher return.

Buying a stock that is risky doesn't mean you will lose money and it doesn't mean it will achieve a 25% gain in one year.  However, both outcomes are possible.

How do you know what the risk is and how do you determine what the potential reward (stock price gain) should be?