Risk and Return – the never-ending trade off that investors and business leaders alike have to grapple with as they make economic decisions. While the risk appetite is driven by a desire for a higher return, there is always the danger of losing a great deal of the investment. With changing monetary policies these days, investors are now forced to look out for higher yields but they have to step outside of their risk profiles and comfort zones – trade-off in short, in order to achieve the same returns as before.
That being said, the investment horizon is also another factor that investors have to consider. How long are you willing to wait before achieving what you need to achieve? The shorter cyclical movements dictate that you may have to abandon previous strategies more quickly in a rapidly fluctuating climate. The only thing that remains unchanged perhaps, is diversification, which still continues to be the best advice – spread the risk out in order to average out the returns. That is your best bet.
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