Myth & Reality 3 Facts About Investment Risk Management
Myth: All risk is bad. Reality: False.
investment process works to do three primary things:
Grilled Mexican Street Corn There will always be some level of risk when it comes to investing; however, some of that risk can be managed with a disciplined investment process. The When it comes to investing, the word “risk” raises a lot of eyebrows. People tend to take a step back when they hear the word tossed around. However, when it comes to investing, risk is necessary. With risk comes reward, and investors must take on risk if they desire to gain returns that exceed the rate of inflation. Take a look at Treasury bills and certificate of deposit. These are backed by the U.S. government and are regarded as risk-free. With a rate of return less than 1 percent, that isn’t at all surprising. Myth: A disciplined investment process helps manage investment risk. Reality: True.
1. Outline steps required to create an investment portfolio and the sequence of actions involved, including defining risk parameters, asset allocation, investment selection, a buy/sell discipline, performance evaluation, and more making and implementing a strategy tailored to your specific goals, objectives, time frame, risk tolerance, and values that seek to manage risk and return over time 3. Establish a framework for evaluating your strategy and tracking progress toward your goals Myth: It’s reasonable to expect high market returns with low risk. Reality: False. 2. Provide structure for decision-
when it comes to investing. Consider one of the basic principles of behavior finance known as loss aversion . An investor becomes “loss averse” when they develop an expectation for high returns from a low risk portfolio. In this case, an investor should not expect high returns if a capital preservation strategy is being applied to part or all of an investment portfolio.
It’s not uncommon for investors to form unreasonable or unrealistic expectations
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Ingredients • ¼ cup mayonnaise • ¼ cup sour cream • ½ cup finely crumbled feta cheese • ½ teaspoon chili powder
• 1 medium clove garlic, minced • ¼ cup finely chopped cilantro leaves • 4 ears corn, shucked • 1 lime, cut into wedges
Instructions 1. Set burners of gas grill to high heat and allow to preheat for 5 minutes. 2. Combine mayonnaise, sour cream, cheese, chili powder, garlic, and cilantro in large bowl. Stir until well-combined and set aside. 3. Place corn on hot grill, rotating occasionally. Grill until cooked through and charred in spots on all sides, for about 8 minutes. 4. Transfer corn to bowl with cheese mixture and use large spoon to evenly coat each ear on all sides. Sprinkle with extra cheese and chili powder and serve immediately with lime wedges.
Recipe inspired by seriouseats.com
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