Risk and Returns Go Hand in Hand in Investment – Ways to Benefit from Risk

Risk and returns are directly linear in nature and thus one has to be ready for volatility as well as non availability of capital if required at a short notice.

One may despise only 8% returns from a  fixed deposit but the we can say that  one has a good amount of liquidity available at a short notice.

If we are looking for a 20 per cent returns from an investment in stock market, than it may happen that when we require the amount we may not get the same as that time market may be in down trend; though overall it may yield 20% returns and same is also applicable for investment in property.

Just remember that risk and returns for risky investments are not known upfront, and have to be estimated and majority of people go wrong in it because of presumptions and mental calculations.

Moral of the story

Invest in higher risk instruments for higher returns only if you have spare cash which you do not require at short notice. Thus ideally have a mix of fixed deposit, investment in stock market and property.

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