Risk versus reward // The Motley Fool Australia
Risk and reward are two of the most fundamental concepts in investing – striking the right balance between the two is essential for any investor’s success. In this article, we look at how you can measure and manage your portfolio risk exposures to maximise your returns.
What is risk and reward?
In investing terms, ‘risk’ refers to the potential for you to suffer a financial loss. Put simply, the riskier an investment is, the more likely you could lose your money.
Typically, we consider junior companies, growth stocks, and other speculative investments (like cryptocurrencies and some forms of financial derivatives) higher risk because they can be complex for investors to understand. Or there might be less information about them,…
