Two Types of Risk With Mark Biller
You've heard it said The greater the risk, the greater the reward. That might be a good strategy for playing Monopoly but for investing a better approach might be to ask, What's the worst that could happen? When it comes to putting up your hard earned dollars there's more than one type of risk and they don't give equal results. Today, our host Rob West welcomes investing expert Mark Biller to explain that for us. The first key is to understand that when risk is discussed in an investment context, what's often being measured is the volatility of an investment in other words, how much does it's return vary over time. Stocks, whose returns vary a lot, have higher volatility, while bonds have lower volatility. And it's appropriate to think of stocks as being riskier than bonds, based on that measurement of volatility. Investors should always consider the likelihood of a permanent loss of capital. There are dangers of being too conservative.