Balancing Your Return Ideals With the Realities of Risk

Posted on September 5, 2012 | Classroom

Every builder starts with a foundation. If you are new to investing, you are building an investment portfolio, and you need to start with an investment foundation. That foundation consists of the basic investment principles.

Boiled down to its bare basics, investing concerns returns and risks.

An investor’s return consists of current income, plus capital gains due to growth, minus any losses from the investment.

Absent a crystal ball, investors can only make an educated guess as to what kind of return to expect. If an investor’s actual return turns out to be different than the return he expected, he could suffer an unexpected loss.

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