By Indexopedia Research Team | October 15, 2024 | In
More often than not, investors seek to achieve the highest investment returns yet seldom consider the risks associated with those returns. The tricky nature of returns is that the more risk you take on, the more potential there is for upside. All too often, investors look through an investment guide or prospectus that shows great historical returns, yet seldom do the investment guides or advertising brochures spend time reviewing the risks or what happens when the fund or investment goes down, and how long the recovery may take. Clearly, greater results often come by accepting greater risk, but the challenge for investors is when they seek high returns without considering the pain of a down market and how long it may take before recovery. If one seeks high returns and invests, but then finds themself in a down market with a long recovery, the challenge becomes staying invested long enough to regain the loss and remain invested to bear fruit. The problem with chasing returns is that higher returns are often directly correlated with recent results. If recent results are high, then average annual returns