Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.
Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be described by a single number. Intuitively we understand that risk varies from investment to investment: a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about their risks the way food packages provide nutritional data.
Risk managers and investment bankers and actually, all kinds of investors took on more risk than they expected. So there was a failure of risk management. There was a failure to recognize how much risk there was in some of these securities that people bought.
There is no such thing as guaranteed high investment returns. Be wary of anyone who promises that you will receive a high rate of return on your investment with little or no risk.
When you say ROI, do you mean return on investment or risk of inaction.
In any business opportunity, you'd be looking, probably, primarily at the risk and return. Some business can be very risky with a low return; what you want is the lowest risk with the biggest return.
When investing, I'm not against risk. If you take no risk you must expect a low return. Just don't let anyone fool you into thinking you can get a high return with low risk.
But a lot of businesses out there don't see the return on investment, they look at it as a liability, and until they can understand that proactive security actually returns, gives them a return on investment, it's still a hard sell for people.
to love is to risk, not being loved in return. to hope is to risk pain. to try is to risk failure. but risk must be taken because the greatest hazard in my life is to risk nothing.
Wall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The low-risk, high-uncertainty [situation] gives us our most sought after coin-toss odds. Heads, I win; tails, I don't lose much.
The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment-the probability of an adverse outcome-is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.
Targeting investment returns leads investors to focus on potential upside rather on downside risk ... rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.
We are not so brazen as to believe that we can perfectly calibrate valuation; determining risk and return for any investment remains an art not an exact science
It is not the return on my investment that I am concerned about; it's the return of my investment
Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.
To laugh is to risk appearing a fool. To weep is to risk appearing sentimental. To reach out to another is to risk involvement. To expose feelings is to risk exposing your true self. To place your ideas and dreams before a crowd is to risk their loss. To love is to risk not being loved in return. To hope is to risk pain. To try is to risk failure. But risks must be taken, because the greatest hazard in life is to risk nothing.