Risk and return

In 100 words or more reply to the statement below about risk and return

  • I have alway thought of risk and return as the higher the risk the higher the return, but this is dependent upon the person and their comfort level. The more risk involved the higher the gains are, but also with that can come major losses as well. Some times taking a dip in that particular scenario could be good for you or it could be really bad depending on the situation. If it dips down and then sky rockets your ok, but if it keeps going down you have to react quickly to keep from loosing your money. For instance you decide to get into the stock exchange and buy stock in what ever your heart desires right. Right there is your risk. Already at this point you are taking a risk in buying shares in something for potential gains. Hopefully if all goes well and how much you bought you could potentially get a great return on it, however, you could take that same risk and buy another share in a different stock, and loose all of your money because that stock crashed or went out of business so the company sold all of its stocks away and left you with nothing. When you go to place to start up retirement accounts this is what you are doing. Even the person that you are dealing with will ask you how much risk are you willing to take? Majority of the time that I hear of risk and returns is when people talk about any kind of stock exchange activity. This includes places like Penny Stock and others.
 
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