Tip #4: Pay attention to the relationship between Risk and Return.
“Most investors are primarily oriented toward return -- how much they can make -- and pay little attention to risk -- how much they can lose.” – Seth Klarman
Regardless of your age, investment style, or experience, think long and hard about the right dose of “risk” for you. Only then can you be realistic about your expected return. The adrenaline rush when taking risks can be exhilarating. But always remember to measure your investment success in relation to the level of risk (volatility) you’re taking. This is known as risk-adjusted return. Too much risk for only modest returns equals sub-par risk-adjusted returns. As for investors that are very risk-averse and prefer low-volatility portfolios, they, too, can manage to fast-forward their wealth through careful diversification and good financial advice. High risk, moderate risk, low risk…There’s room for all of us to invest and thrive!
Fast-forward your wealth with Next Pronto TIPS.