RISK V/S RETURN GET THE BALANCE RIGHT





UNDERSTAND HOW RISK DIFFERS

EVEN THE DEGREE OF RISK VARIES

SO, HOW DO YOU BALANCE THIS?

RISK v/s RETURN

DIVERSIFY TO MINIMISE RISK

MUTUAL FUND CAN HELP!

GO THE SIP WAY

KEY TAKEAWAYS

Every investment risk differs. The first step is to understand this

Opt for investments that give higher returns for lower risks

Fund Managers help lower risk through their experience.

1.Every investment has different risk factors that cause the asset's value to fall. For example, with Fixed Deposits, there's a risk that banks may fail to pay back the money. With Equity, the risk is related to price fluctuations.2.Another difference lies in the probability. The higher the probability of loss, the riskier is the asset. Volatility is one way of measuring risk. The price fluctuations are why Stocks are considered riskier.3.Risk comes from not knowing what you're doing." Warren Buffett, one of the greatest investors in the world, said. So read about what affects your investments. For example, high inflation may be bad news for Equities, but good for Gold.4.Yes, greater the risk, higher is the potential for returns. However, the exact amount of return for every unit of risk may vary. The Sharpe Ratio measures this. Opt for investments with a high Sharpe Ratio5.Another step in reducing risk is by diversification. So, when one investment falls in value, the other could give you enough returns. This is why every portfolio should contain a little of both-Equities and Debt6.Outsource both the need for knowledge as well as diversification by investing through MFs. Let expert Fund Managers invest on your behalf across multiple assets. This can reduce your risk by a great deal7.Invest small amounts every month So, you invest at different prices every month. So, whether the market is high or low, you end up getting an average cost This lowers risk in the long run.