investments are risk

investments are risk return related

Financial  Risk & Return

Understanding risk and looking around, we see that different financial products, such as fixed deposit bonds and stocks, offer different benefits. To answer this we must first understand why the returns change The idea of ​​risk is an important principle of investing High returns on high risk risks Fixed deposits earn the lowest returns on securities as they have the most expected returns on the most risky investment grade bonds They expect less return on the land and stocks because they are less risky than the stocks they invest in. If an investment yields high expected returns, there will be no risk-free return.

investments are risk return

Assume that the return on investment is 3% higher than the expected return on average. The actual return on investment will be more than 3%. The returns will be less than 3% The actual returns will be 3% only if the investment is performed as expected [music] The presence of risk or volatility means that the expected return may be different from its actual return. The difference between real and expected returns is a simple statistical measure of risk or volatility risk. The so-called instability rate will yield a higher return. Our goal is to maximize the benefits of maximizing the sharpness ratio.

The only risk or risk minimization to be successful in investing is to assess your risk appetite Your risk appetite should be assessed in 3D. If you are planning to retire at 40, you need the ability and the will to take the risk. You should get high returns. If you have dependents you will be allowed to retire early, you are less likely to take risks than someone who is not dependent If you have the need and ability to take risks If it seems uncomfortable after buying risky stocks less like investment grade bonds You may want to consider investing with a risk profile.

investments are risk return

If you choose, consider investing in a rollercoaster ride as an option. A Wilderness ride you will need to get halfway down that trip is more than you can handle, and it’s just as scary when you die. If you have risky investments for your risk appetite, you may be nervous and avoid them prematurely when the market plunges. The key to a successful investment is the ability to stay afloat if you get off the roller coaster halfway.

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