Rescue Your Money by Ric Edelman

Author:Ric Edelman
Language: eng
Format: epub
Publisher: Simon & Schuster
Published: 2009-03-10T00:00:00+00:00

Measure of Standard Deviation. Source: Morningstar Direct. Past performance does not guarantee future results.

That’s no surprise. After all, it’s the main reason people diversify: to lower their risk. But some people hesitate to lower their risk, because they fear that doing so will also lower their return.

But that’s not necessarily the case! Take a look at Figure 5.4, which reveals the returns generated by those two portfolios over that same period.

As you can see, the highly diversified portfolio generated average returns that were higher than those produced by the portfolio that owned only stocks — and it did so with much less risk.

In other words, lowering the risk does not necessarily mean you get lower returns. (Of course, the results showed in Figures 5.3 and 5.4 are specific to that 15-year period; this is not meant to imply any guarantee about future results.)

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.