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Highest return? Nobody invests to get the lowest return. What makes it interesting is what your risk aversion is. If you need the highest guaranteed return, you
by fusiongyro 14y ago
Highest return? Nobody invests to get the lowest return. What makes it interesting is what your risk aversion is. If you need the highest guaranteed return, you're looking at something with a very low yield and/or a very long timeframe, like a US treasury savings bond. If you want the highest possible return, you're looking at something like a lottery ticket. Between these extremes are most of the interesting investments, but the returns are not astronomical or instantaneous.
- Schwolop 14y agoI dispute this. I just sold my house, and will buy another one soon. I don't know the timeframe however, so there's no way I'd put the cash into the highest return vehicle because it will likely have a high volatility and I might need the cash at an inopportune time. As a result, I've dumped the cash in pretty much the lowest return vehicle, simply because I can take it back again whenever I need. The timescale of the investment should definitely change the priorities.
- fusiongyro 14y agoI don't think we're actually in disagreement. The point I'm trying to make is that the risk and timescale are more important factors than the yield. You chose the highest yield investment you could find with the liquidity and stability you needed. The yield was not your primary concern--it almost never is.
- Schwolop 14y agoRighteo, I think I misread your comment then. I agree.