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But it seems that most people don't really beat the index funds so the expected returns are essentially the same as index funds. Without higher returns why woul
by tdb7893 10y ago
But it seems that most people don't really beat the index funds so the expected returns are essentially the same as index funds. Without higher returns why would you take higher risk?
- gozur88 10y agoYour returns are potentially higher. And lower. Let's say I want to take an Alaskan cruise, but I don't quite have the money. If I get a higher return I'll have enough to go. If I get a lower return I won't go, and I'll still have enough money for rent. In my (admittedly contrived) scenario I'm willing to accept more risk as long as my returns are potentially higher.
- ThrustVectoring 10y agoIt's risk-adjusted return that you and the GP care about. It's fairly straightforward to add both risk and return - just add leverage. Picking individual stocks, on the other hand, means you wind up being the "dumb money" that the "smart money" systematically takes advantage of.